Grocery Retailers Have a Mixed Bag of Expectations for 2023
Vice President, Shopper Insights Research
Supermarket News recently released their third annual grocery retail expectations survey for 2023. And despite decreasing confidence in the state of the economy, grocers are employing tactics to meet the needs of today’s value-conscious shopper, while also working to minimize the biggest threats to their operations, which can not only impact the shopper experience, but the cost paid at the register.
Economic Confidence Continues to Decline
Grocery retailers’ confidence in the economy for the coming year has declined every year since this survey was first implemented. While previous years had the uncertainty of COVID, inflation and a potential recession seem to be weighing heavily on retailers’ minds for 2023.
This means retailers are also being more cautious with major expenditures; that is only 27% are planning to add stores in 2023.
Grocers Focus on Value and Experience to Drive Sales
Although grocery retailers lack confidence in the economy, the majority (73%) have forecasted a sales increase for the first half of 2023 as they focus on value and experience to engage shoppers looking to stretch their dollars.
Fresh produce is predicted by almost two-thirds (63%) of grocers to provide the most success, while just about one-half (48%) are still expecting challenges with fresh meat because of the unpredictability of inflation and pricing in this category. Private label provides value during economic downturns that shoppers appreciate, and some find they prefer over national brands, which only serves to increase loyalty to retailers carrying favored private label brands.
Labor, Inflation, and Supply Chain Continue to Present Challenges
Despite talk that inflation is subsiding, it is still a major concern for grocers along with labor and supply chain issues. Retailers have been struggling to attract and retain employees that help ensure an optimal experience for the shopper and this struggle is expected to continue in 2023 since many grocers operate on thin margins and may not be able to offer wages that other industries provide.
Out-of-stocks reflect badly on the retailer as well as the brand in question, which is why retailers want to minimize this situation and ensure the shoppers stay at their store to find the products they need, when they need them.
In the end, 2023 promises to be another challenging year for grocers; but they’ve learned to be resilient given the last few years have brought unforeseen and new challenges. Grocers are adept at adjusting to the ever-changing economy and marketplace, and 2023 will be another year where they rise to the occasion as they work to meet shopper demands.