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Goodfood Market Corporation is a Canadian online grocery, home meal and meal kit company based in Montréal, Québec.
Goodfood Market Corporation is a Canadian online grocery, home meal and meal kit company based in Montréal, Québec.
August 26, 2021

All indications are that Canada will be coping with a fourth wave of COVID-19 and it will likely have a different impact from previous waves. With vaccination levels growing, but different in every province, the impact of the fourth wave will require focus in your business to manage through it.

 

The message from public health officials is that two doses of vaccine are the best defense and many Canadians are following this advice. We still have to consider there are no vaccines approved for anyone under 12 and there will be a percentage of the population who are not vaccinated. Consumers will behave differently during this wave.

 

Sales forecasting

 

An important consideration is what will happen to sales? It has been very challenging to forecast and we know the fourth quarter of 2021 will be different from the fourth quarter of 2020. It is likely the market will look more like a mix of  2019 and 2020. With restaurants open, that will be more similar to 2019 however many people are still working remotely and therefore eating more at home. Travel within Canada is more accessible but the fourth wave might reduce people’s desire to be moving around and on airplanes.

 

Talk to your customers to understand what they see in the fourth quarter. My advice would always be to do your homework and provide them with a forecast. Then have the conversation to understand if you are both looking at the volume with the same changes planned. Retailers do not like to do your work so put together a forecast and review it with them. You will be judged by your ability to meet their expectations, so you need to understand what they are looking for.

 

As the impact of the pandemic continues, we are experiencing different realities in different provinces or regions. It will be important to understand the retail environment in the regions where your customers are located. If you are producing in the west and selling into stores in Ontario and Québec, the opportunity might be very different in each province and what you see at home.

 

Food service recovery will impact retail

 

There is only so much people can eat and where they choose to purchase their food can have a big impact on your business. We know food service was severely impacted by the pandemic and many suppliers had to find alternative markets or perhaps stop producing. As food service recovers and consumers gain confidence in going out or ordering in, our industry will have to adapt again.

 

The recovery will be slow as food service has to find staff and for many, re-open. This is a challenge and they will have to be cautious to ensure they do not incur a lot of shrink or food waste. Learn about how they plan to re-open and consider the changes they will manage such as new staff, more take-out than eat-in, less complicated menus etc. Similar to retailers, they are all different so if you sell into food service, try to learn about their plans.

 

There could also be opportunities in this sector as some suppliers might have shifted focus or moved on. 

 

Shifts within retail formats

 

One impact the pandemic had on retail was consumers shopped more in conventional stores. For many it was about one stop and the conventional stores had a larger listing base. Consumers had the most confidence in getting what they needed in these stores.

 

Despite the fourth wave, it is apparent consumers are going back to discount stores. This will lead to more focus on price from retailers. At the height of the pandemic it was more about service level. This will still be important but with consumers going back to discount stores, suppliers need to expect more focus on discount packs and prices.

 

If you have had changes in your costing (which many have), talk to your customers up front. Make sure they understand the facts and that a previous cost is no longer attainable. They need to know in advance that they might have to consider 3/$2 or 2/$3 instead of the .99 they did in 2019. 

 

The shift back to discount will also impact product mix. These stores have a smaller listing base and different product sizes. Consider this in your fourth quarter planning. 

 

The e-commerce channel is up and down

 

Retailers invested significantly in online shopping, order selection and developing the digital relationship with their shoppers. During the height of the pandemic, this was capturing 10-15 per cent of sales at some retailers. It is likely this has subsided as many consumers are back to old habits and shopping in-store. 

 

During a fourth wave, it is likely consumers with children under 12 will be more likely to take advantage of online shopping. These are valued consumers because they usually buy a lot. Retailers will be looking for opportunities to appeal to them with online offers. 

 

We know retailers do not invest money and resources and then sit back if results are not there. They will be looking for opportunities to encourage consumers to continue shopping online. Sobeys made a significant investment in their online shopping, order selection and delivery in Ontario with Voilà, so they will need to keep volume moving through there.

 

Every retailer has their own solution to online shopping. Stay close to your customers and watch what they are doing. There could be opportunities to support some of the initiatives and find more volume.

 

Unfortunately we cannot see into the future and understand the impact of the fourth wave. However, your customers -- the retailers and food service industry --  will appreciate it when you discuss your plans with them. When you both have the same forecast you have the best chance of success. Continue talking to your customers through the fourth wave and exceed their expectations when you can.

 

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Submitted by Peter Chapman on 26 August 2021