Using the Past to Predict the Future of Grocery Retail in the US

The pandemic has triggered a major shift in how people obtain and consume food. Before the pandemic, most people went to the grocery store to buy food and occasionally ate at restaurants. During the pandemic, people’s daily routines were disrupted. People started utilizing grocery delivery or pickup services rather than potentially exposing themselves to the virus. Many restaurants also experienced declining revenue from shutdown orders and people cooking more at home to save money or use their free time. American’s habits post-pandemic remain an open question. Will patterns established in the last 18 months continue? Or was there something consumers loved about the in store experience that they are eager to return to? Some grocers like Trader Joe’s are betting that consumers will flock back to its stores by refusing to offer grocery delivery or pickup from its wildly popular locations. However most national chains are changing the layouts of their stores to accommodate changing consumer preferences. Traditional grocers can compete in the new area of food retailing by innovating and adapting to the new normal.

This paper seeks to trace the development of food retailing in the US from the earliest stores to present day. Taking a historical view into the development of the industry will allow room for analysis of what pandemic related changes are here to stay. There are major format innovations in the grocery category that can be predicted by taking a historical and international perspective on how these shops have changed in the past century. The example of Webvan in 2001 and grocery delivery practices in the UK and China will be used to predict what role the in-store experience, delivery, and pickup will play in the post pandemic normal in the United States.??

Earliest supermarkets in the US

The concept of a chain supermarket rose to prominence during the Great Depression of the 1930s. Up until this point, most people went to several specialized mom and pop shops to purchase bread, meat, and produce. People’s dire financial straits during the depression made the food in these shops unaffordable. Chain supermarkets filled this market void by offering lower prices through bulk buying and more efficient store layouts and supply chains. In fact, “Between 1914 and 1930, the corporate chains had grown from 2030 organizations with 24,000 retail outlets and a billion dollars of sales, to 7,853 organizations with 200,000 retail stores and volume of over 15 billion dollars” (Zimmerman). This explosive growth shows the demand for cheaper, standardized groceries during this time. The changes to grocery in this decade were mainly format innovation, with mom and pop stores giving way to regional chains, and eventually national supermarkets.?

At the time, Americans spent around a third of their income on groceries. One of the reasons for high prices was the common practice of delivering items to the home and a credit system of letting the consumer pay for the goods by the end of the month. These two features increased costs for the neighborhood grocers (Brown). One study found that independent grocers had prices that were 5% higher than those chain grocers in the Washington D.C. area (Basker et. al.). I would have expected a larger price differential, but this 5% may have been due to the existing tough competition in major metropolitan areas like D.C. and the time period of the data being 1929-1930. This was before the boom of larger national chains with high buying and bargaining power. During the Great Depression, older models of grocery retailing were replaced by cheaper formats. The pandemic fueled economic downturn fueled another major change in the business model.?

In addition to low prices, the chain stores had another major advantage. The typical corner grocer had a person behind the counter selling and showing products to the consumers. These grocery stores were often small, so they did not have the floor space for self service. The concept of consumers picking out exactly what they wanted on their own was still revolutionary. Once the regional and national chains implemented this self service concept, it changed the future of American retailing. The operators of supermarkets realized that people, mainly women, were better at selling themselves products than a person behind a counter.

?This strategy was so successful that it “raised the average food purchase in the supermarket of that day to between $1.50 to $2.00 per customer, as compared to $0.60 in a chain, and $0.35 in the corner grocery” (Zimmerman). Of course, part of this increase may have been because the supermarket had more products than a corner grocery. Grocers carried an average of 867 products in the mid-1920s to over 30,000? products by the 1990s (Basker). Larger store formats came about due to innovations in the automobile, refrigeration, and packaging (Basker). These innovations made shopping trips more infrequent. However, the endurance of the self service format, and its spread to other areas of retailing, shows it's clear dominance as a strategy. Grocery continues to move in the self service direction with self checkout lanes and online ordering. One reason for this may have been that self service forces consumers to spend more time in a store. Having an employee helping customers would make their shopping trip quicker and more efficient, and thereby reduce sales. Putting this labor on consumers cut costs and increased sales for stores.??

The first chain supermarkets prioritized low prices over all else. They purposely sought out abandoned factories and old warehouses for their store locations. They outfitted these buildings with the cheapest light fixtures available and kept overhead low. Part of this strategy was to save money, but consumers also approved of these types of setups because they believed that they were getting a better deal on their groceries. In modern terms, these early retailers could be seen as discount stores. During the depression, these locations were very successful because they directly addressed the consumer’s needs.??

The Great Atlantic & Pacific Tea Company (A&P), a grocery brand that introduced an economy grocer format in 1912 (Ellickson), was the first chain that went national in 1937 in the expansive ‘supermarket’ format. By the end of 1937, supermarkets were again being reinvented to more closely resemble modern locations. Retailers realized that the strategy of using old warehouses and competing on price was ultimately a race to the bottom, especially with competition heating up from Kroger, Acme, and Safeway and other high growth brands. A&P opened a 8,000 square foot facility in Fort Wayne, Indiana that was housed in a modern building with the latest light fixtures, large parking lot, and an automatic refrigeration system. These types of locations were being rolled out by the other national players too as the industry moved to make the shopping experience more enjoyable and convenient for the consumer.(Zimmerman). By the 1950s, chains had opened better looking locations located near suburbs to cater to a less price conscious clientele (Ellickson). These locations resembled modern grocery stores today.?

It is unusual that as the grocery retailing category was developing, brands competed on price before features. According to the innovation curve, players in the ‘late majority’ stage tend to bring in lower cost options, while early firms cater to less price conscious consumers with the newest technology. One of the reasons for this unusual development might be the type of innovation, type of product, and the massive disruption to daily life from the Great Depression. Format innovation may not lend itself to the classic innovation curve. Food is an essential good, so the retail format for it may not follow the same adoption curve as other innovations. Finally, the depression disrupted many industries and businesses, so people may not have had the money to support grocers becoming more upscale or differentiated.??

A&P’s explosive growth made them targets of politicians and small business owners alike. Mom and pop grocers worried about their declining sales by the movement of lower priced national chains. The smaller grocers struggled to offer the same prices because often they only had space to sell one type of product that might have a lower markup to begin with, and they could not order in the same volume as the larger companies. The U.S. passed the Robinson-Patman Act of 1936 that protected, “small businesses from being driven out of the marketplace by prohibiting discrimination in pricing, promotional allowances, and advertising by large franchised companies.” (Campagna). The act also protected wholesalers from retailers bypassing them to buy directly from manufacturers (Ellickson). At the time this law was seen as a major win against the takeover of grocery retailing by large chains. It was also just one of a series of laws designed to heavily tax and regulate chain stores in an effort to even the playing field for the neighborhood chains. Unfortunately, this act had little success in accomplishing its main goals. Large chain stores like A&P continued to defy the law by exploiting technical loopholes. It even hurt some independent chains because the law made it illegal for them to negotiate together with other independent chains to get the best deals from wholesalers.?

There is little national level data on what happened to the independent grocery stores. Many of them were bought out and taken over by chains. Others simply went out of business. Today one in four grocery dollars are spent at Walmart. However in 2019 smaller family- or employee-owned grocery stores still sell 25% of all groceries, mainly in rural areas (Food and Power). Food industry groups are calling for the revival of the Robinson- Packman act. Covid related shortages are causing wholesalers to choose between meeting their order obligations to national chains or regional retailers. Many are discriminating against independent locations in favor of the national chains that can penalize distributors if they do not meet their order obligations. Despite this happening, the law is rarely enforced. Independent retailers today exist mostly in rural areas that are not served by any major chains. This makes sense because if a location has enough population to support a Walmart, independent retailers would struggle to stay in business, just like the neighborhood grocers and early supermarket chains.?

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From the first national grocery chain to the rise of Walmart

After a peak and saturation in the 1970s with the traditional supermarket format, companies began innovating to create a more differentiated experience. Some significant brands started during this time include warehouse clubs like “the first Price Club (‘76), the first Costco (‘83), and the first Sam’s Club (‘83). Meanwhile the first Aldi was opened in 1976 and the first Save-A-Lot in 1977. At the other end of the spectrum, natural food stores and superettes like Whole Foods (‘78) and Trader Joes (‘66)” (Ellickson) opened as well. These new store formats sought to cater to different kinds of shoppers and find innovative ways to be profitable within a highly competitive and saturated industry. Similar to modern trends in clothing retail, the high and low ends of grocery retailing have been growing while the stores that cater to the middle have struggled (Ellickson) This may be because stores in the middle lack a clear value proposition for customers. Additionally, the American middle class has been shrinking for decades. The customer base for these mid priced stores is disappearing regardless of how they try to appeal to the segment.

The introduction of Walmart into the grocery space had a profound effect on the structure of the industry. Starting in 1988, the chain has consistently opened over 100 superstores per year (Ellickson). In 2021, Walmart operates 3,570 supercenters and 799 neighborhood markets in the US (Statista). Walmart’s downward pressure on prices triggered a series of mega mergers in the industry. Companies cite greater buying economies and Walmart as two main catalysts for a merger. Walmart was able to offer lower prices than competitors by leveraging technology, their lean corporate structure, and purchasing economies (Basker). Walmart was quick to adopt inventory management systems like bar code technology to track sales across stores and operate more efficiently than traditional grocery stores. Walmart also locates stores near each other to take advantage of economies of density, even at the risk of potential sales cannibalization (Basker).?

When Walmart locations open, they tend to cause a decline in small discount retailers. They also cause a fall in profits for larger grocery stores. In one study of “a single market in upstate New York, an incumbent supermarket lost 17 percent of its sales volume — but did not shut down — in the year following a Wal-Mart Supercenter entry two miles away.” (Basker). While this study has clear limitations because it only looks at one market, this supports other data that shows Walmart’s effect on incumbent stores in terms of downward pressure on prices. Walmart seems to offer it all-? low prices, convenient layouts, and a one stop shop destination for consumers. However, it lacks depth in product offerings. It carries a vast breadth of products that facilitate better bargaining contracts with suppliers. In higher income households with more specialized tastes, higher end grocery stores still serve a purpose in terms of increasing consumer willingness to pay for their unique product offering.

Other major changes to the grocery store since the 1970s was a major change in convenience. By the 1970s, 50% of single women, and 40% of married women were in the workforce. By the late 1990s, 74% of women 25 to 54 were working (Yellen). As more women entered the workforce, they started looking for ways to make grocery shopping and cooking easier. Grocery stores started introducing “in-store delis, salad bars, and bakeries, and beginning in the late 1990s, they were beginning to offer prepared meals”. Grocery stores saw their market share being eroded by restaurants and sought to win back shoppers with their own convenient options. Grocery delivery can be seen as another way grocery stores seek to meet the needs of shoppers and continue to reinvent how consumers interact with them. While some shoppers are price conscious, many value convenience, quality, and novelty as seen by the success of Trader Joes and other specialty grocers.

Developments during the pandemic

Consumers have shown a willingness to take a chance on a new service during the pandemic which has greatly benefitted startups over traditional grocers. Before the pandemic, grocery delivery was reserved as a feature of the most premium grocery stores like Whole Foods. Eighteen months into the pandemic, it is seen as a more common feature even among low to mid tier stores. In many ways this seems like a reversion back to the earliest days of grocery retailing with neighborhood stores charging high prices for delivery. Amazon’s free delivery offering made increasing willingness to pay for delivery difficult across the industry. The pandemic forced grocers to innovate and merge low prices with the convenience of delivery, whereas in the past customers had to make a tradeoff between convenience and price.?

The pandemic has caused a radical change in how people consume food and other essential goods. Prior to the pandemic, Americans ate 54% of food away from home (Grashuis et. al.). Food spending away from home fell 48% from October 2020 to April 2020 (USDA Economic Research Service) while sales in the grocery sector shot up 26.9%, between February and March 2020 according to the U.S. Census Bureau. Consumers not only shopped at grocery stores more, they also used grocery delivery and pickup services. Before the pandemic, 9% of consumers participated in grocery delivery and 15% in grocery pickup. When the pandemic hit, those numbers rose to 15% and 25% respectively (Chenarides et. al.). Before the pandemic, there was no impetus for consumers to change their grocery shopping habits. Perhaps some liked shopping in person, and others were not aware of pickup and delivery options. The pandemic made in-person shopping unsafe for many people which brought delivery and pickup options to the forefront.

The dominant grocery strategy should emerge as the most popular under the traditional economic model. If grocery could be done in a way that is better for consumers, that should become more popular and profitable than alternate strategies. On this premise, speculation surrounds the question about why these were underutilized in the US before the pandemic, and if there have been any fundamental changes to consumer preferences or the environment that would make this switch the delivery and pickup permanent for some customers. Many of the factors that initially drove a revolution of convenience in grocery retail have not changed significantly such as women in the workforce, refrigeration, automobiles, and a move to the suburbs. Perhaps delivery and pickup were dominant strategies, but there was no incentive to adopt them and get over the initial learning curve. Another idea is that maybe people enjoyed going to grocery stores. Some companies like Trader Joes built their brand around the idea that grocery shopping could be a fun adventure rather than a chore.????

New frontiers of convenience

The pandemic fundamentally changed grocery pickup and delivery options to be more enticing to consumers. To put grocery delivery in a historical context, Webvan was one of the first companies to introduce the concept in the US during the dot com bubble. They used a mass market strategy of ‘high quality groceries at low prices delivered to your door’. Webvan was also an infrastructure heavy company. They built, owned and operated major warehouses near large, metropolitan areas. Finally, in line with other tech companies during that time, they raised $800 million dollars and expanded as quickly as they could around the US (Wilder). Ultimately it was a combination of these factors that caused the demise of the company. Some may say that their failure was caused by having an idea ahead of its time. However many of the same environmental factors that existed pre pandemic existed in the 2000s. Before the pandemic, about 9% of consumers used a grocery delivery service. During Webvan’s time, a similar percentage of customers may have been interested in the service.?

Webvan failed because it tried to be everything to everyone too quickly. They should have identified their target market as upscale, less price sensitive consumers who would buy into the idea for its novelty and convenience, not because they were getting a great bargain. Charging higher prices would have helped the company support some of its massive infrastructure spending. Webvan could have tried to streamline operations by perhaps offering a more standardized, small assortment of products. They could have also focused on creating a minimal viable prototype before expanding into cities beyond the Bay Area (Wilder).?

Webvan’s failure in the 2000s to make grocery delivery work is a cautionary tale for modern grocery delivery companies like Instacart, Peapod, Amazon Fresh, and others. However, it seems that these companies have been able to avoid many of the challenges Webvan faced. All of them rely on existing grocery infrastructure, so they are able to run lean operations that don't require major capital investment. Some rely on the gig economy to deliver groceries rather than operating their own delivery vans and hiring employees. They also are targeting more affluent customers. Instacart has a markup on groceries before factoring in any delivery costs or other charges. This service is clearly for affluent customers who value convenience. Amazon Prime offers free grocery delivery and no markups. However, Whole Foods is already considered an upscale retailer, so even this service is not taking a mass market approach of Webvan.?

Supermarkets in the UK like Tesco and Albertsons have figured out how to make grocery delivery profitable since at least 2003. When Webvan collapsed, scholars were interested in why it did not work compared to the thriving delivery service in the UK. Was it a business model issue or a fundamental difference in consumer preferences between the two countries? The most likely scenario is that it was a combination of both, with Webvan’s business model being more to blame.

Tesco and other major UK based grocery retailers have a few key advantages that make running a grocery delivery service easier. On the external factors side, the UK is more densely populated so deliveries are faster and easier. Also, supermarkets in the UK sell over three times more than what U.S.supermarkets do in terms of $/sq. Customers often have to wait in long lines and experience much more crowded supermarkets than we do in the US. This may increase their willingness to seek out and pay for this service. On the business model side, Tesco used its neighborhood store locations from the start rather than building separate warehouses like Webvan. Initially it may have seemed inefficient to have workers at Tesco manually gathering shopper’s orders from store shelves to then package and deliver. However Tesco made this process more streamlined by having one worker shop for many orders at once with, for example, a sectioned off cart. A worker would know the store better than an average shopper which could make for a faster process (Delaney-Klinger et. al.).?

Webvan capital heavy model with long conveyor belts and a desire to automate everything stands in stark contrast to Tesco’s primitive model. Another key difference is that Tesco guarantees delivery in a one hour time window compared to Webvan’s 30 minute window. This difference affects the operational decisions of the companies, and could have been a key factor between being profitable or going out of business. Tesco’s model has high costs per delivery while Webvan’s service has high upfront costs. Tesco’s model was more successful because it recognized that shoppers who used this service were not as price conscious. Tesco could cover any excess costs by charging customers more. Webvan thought it could be profitable through scale, but failed to segment the market effectively.

Webvan’s failure to segment the market is reminiscent of the struggles corner stores faced when competing with chain grocery stores in the 1930s. The mom and pop stores should have accepted that they would not be able to compete on price with the large retailers. They should have tried to find other ways to differentiate their offering. For example, a bakery could have made new kinds of products that were not available in chains. Instead they fought the chains with the Robinson-Packman act and ultimately failed. Webvan should have realized that they could not be cheap, convenient, and high quality. By optimizing for one of these categories, Webvan would have had a higher chance of building and maintaining a loyal customer base. Since Webvan was investing millions into their processing and delivery operations, optimizing for convenience would have made the most sense for them.?

The pandemic has caused UK grocers to question how they fulfill online orders. Despite the increased sales from consumers buying more groceries, major supermarkets in the UK have not realized the increased profits that one may expect. While grocery delivery is profitable for them, it is still their least profitable channel compared to in store shopping. Some estimates put the costs of grocery delivery to be between ￡12-￡14 per order (Eley et. al.). UK companies did not have an incentive to make their primitive systems more efficient prior to the pandemic because grocery delivery was still a small part of their business. Now with this category exploding with growth and poised to continue into the future, investments need to be made in increasing efficiency and decreasing per order costs.?

Over 20 years after the Webvan debacle, Amazon is redefining the idea that grocery delivery is a luxury that customers should have to pay high fees for. Amazon Prime offers a free grocery delivery service to Prime members. Amazon can afford to make a loss as it figures out how to scale the offering to be more profitable. Even if Tesco and other UK supermarkets are targeting affluent customers, this segment most likely also has a Prime membership and would be fine shopping at Whole Foods, so they would prefer to stay in that ecosystem and take advantage of the free delivery.

Companies in China have been trying to make grocery delivery work too. A startup in China called Miss Fresh raised $1.5 billion since 2014 and is now valued at $3 billion. The company built a network of small distribution centers just outside major cities and employed a large number of drivers on scooters to make quick deliveries. Miss Fresh’s success is exceptional; over 150 online grocery startups have failed in the country in recent years. Businesses in China have access to cheap labor, so Miss Fresh’s labor intensive business model can work there but would probably fail in the West.

Grocers in the UK are using their own innovative methods to make grocery delivery work. Tesco is capitalizing on its ‘dark stores’, or mini fulfillment centers in major urban areas designed for delivery efficiency it had started opening in 2013 (Felsted). Others like UK based startup Ocado took a more Webvan like approach in terms of using automation to reduce per order costs. This service has been successful and has grown through the pandemic most likely because it avoided many of the financial pitfalls of Webvan. Companies have been trying to figure out grocery delivery for over two decades now. Some of the challenges might be that groceries are low margin products that are big, bulky, and perishable. There are significant logistical challenges in doing grocery delivery right that can be overcome by a massive company like Amazon, an extremely well financed startup like Miss Fresh, or a firm like Ocado that can master both the challenging operational and scaling side of the company.

Traditional grocery stores are at a disadvantage compared to startups that can dedicate all their resources to making delivery profitable. Grocers have to balance maintaining inviting stores and figuring out delivery at the same time. Traditional grocery stores are designed to keep customers there for as long as possible which is detrimental to fulfilling online orders. In a push for increased profitability, the experience consumers have when on the app itself may change to become more commercialized. Both Instacart and Ocado have paid spots where brands can pay to promote their product on the app, similar to how they can pay extra to retailers for prime shelf space. Grocers are starting to adopt this practice too which may help their own profitability.

In a historical context, individual food brands play a larger role today than they did in the past. In the days before chain stores, people bought staples like wheat, bread, coffee, tea, sugar, produce, and meat. Then large food companies like Kraft started selling processed foods to help working women prepare food faster. Today customers are increasingly seeking novel and healthier options in the grocery store. Traditional brands have been slower to adapt, which means that startup consumer packaged goods brands are entering a crowded and competitive space where most new products fail quickly. Retailers can use this lower supplier bargaining power dynamic to their advantage to capture more value.????????

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The future of the supermarket

Was the pandemic a disaster or a great opportunity for the grocery industry? It depends on who you ask. Companies like Amazon, Ocado, and Instacart were well positioned to leverage their pickup and delivery operations for the pandemic world. Some traditional grocers like Tesco had some infrastructure in place and could use the pandemic to kickstart the process of lowering per delivery costs and becoming more profitable. It seems like US grocers felt the most pain from the digital shift since many of them had minimal investments in this category. Instead of the grocery stores capturing value, an army of third party apps with gig workers have taken it out of their hands. While many delivery apps have partnerships with national brands, these agreements must benefit the delivery apps since grocery stores are in a tough bargaining position since they do not have robust internal capabilities.?

Supermarkets have consistently adapted to changes in consumer preferences and the business environment. One overarching trend I noticed since the prevalence of? mom and pop grocery stores was the declining role of human interaction in the grocery browsing and purchase process. Before the chain supermarket, people went to specialized neighborhood shops where shopkeepers might have gossiped with customers, shown a customer what they thought they were looking for, and negotiated the purchase. Some shops would offer credit to customers to pay off the purchase later. That format then transformed into the customer browsing and choosing what they wanted off the shelf. Their only face to face interaction was at checkout. Soon that too decreased with self checkout lanes. Grocery pickup and delivery is just another extension of that in which customers do not have to even see, much less talk to, anyone else. Many people worry about social isolation and social media filling in for a lack of a ‘town square’. However, when seen in a historical context, this shift toward less interaction is gradual and fairly consistent through time.?

One factor that may make some of the increases in grocery pickup and delivery permanent is the increased number of workers skipping the commute and working remotely part time or full time. If they are at home for long periods, Tesco’s 2 hour delivery window may seem perfectly acceptable whereas in the past, people may have had to leave the home. Workers may continue to buy more groceries rather than eat out, so pickup and delivery options will stay elevated due to an overall increase in the grocery category. Additionally, due to the pandemic many first time online grocery shoppers may come to prefer the service to in person retail as in line with the historical trend of less interaction.?

Despite the rise in pickup and delivery, physical locations of grocery stores will still play a major role in store sales and profitability. Prior to the pandemic, many grocers were investing in making their stores more pleasant to shop at. Similar to how innovations in refrigeration, transportation, and inventory management changed shopping habits made the old stores obsolete; traditional grocery retailers will need to adapt to the shift in consumer preferences or lose market share to Amazon or gig economy fueled delivery apps. Giant is one example of a grocer that has made steps to adapt.

Almost a year after the pandemic was declared, Giant, a chain grocery store, opened a new location on the Riverwalk in Philadelphia. In the press it was heralded as the trendy grocery store of the future. I visited this location a few weeks after it opened, and the store seemed to embody many of the trends seen in physical grocery stores today. I saw that the location invested heavily in providing a unique experience to keep customers in the store for longer. The Giant had a Mission Taqueria, Saladworks and Hissho Sushi inside, along with its own made-to-order foods and upscale food items like gelato and cannoli. The location also took advantage of its view of the Schuylkill river by building a beer garden and outdoor terrace with over 40 craft beers, wines, hard seltzer, cider and kombucha on tap.?

Grocery stores have been moving toward convenient food options for decades. However, offering basic food items means that the grocery stores are losing profits to restaurants with offerings more tailored to customer tastes. Giant saw an opportunity to ramp up their in-store experience to capture some of the higher margin made to order foods instead of trying to make their profits on low margin grocery retail. By becoming a food destination itself, Giant can have shoppers think of a shopping trip as more of an experience rather than a weekly necessity. Additionally, the restaurants will most likely attract a more affluent demographic which could translate to higher sales of their grocery business. This type of store can help mid priced retailers like Giant move into the high end groceries segment without alienating their core demographic.

Conclusion

The supermarket of the future will have to serve many more purposes than grocery stores in the past. Grocery has evolved from stores that carried one type of product to stores that have a vast array of conventional and speciality groceries, along with prepared foods, unique amenities, and streamlined grocery pickup and delivery options. The growth of the pickup and delivery section does not mean that the grocery store turns into an unattractive warehouse style location. The investment by Giant into the store experience is a move to attract customers that still want to buy their groceries in person and people seeking a restaurant experience. While those buying groceries in person may decrease in the future, the beer garden and outdoor terrace may be just the kind of features that would bring the younger generations to the store.?

The pandemic brought opportunity and disaster in the grocery retailing industry. Disaster came when traditional grocers saw their most profitable business slow overnight and shift to less profitable delivery. Amazon and well financed, nimble startups saw major opportunity while traditional grocers, especially in the US, were caught on their heels. Technology is playing a large role in all industries, and ignoring technological progress in route mapping, automation, and warehousing made traditional grocers less able to adapt to the drastic changes in shopping preferences caused by the pandemic. However, traditional grocers have some advantages like an existing network of stores in prime areas with access to consumers. Additionally, they may have ties with the local community and understand innovative ways of distributing goods to customers. Finally, they have decades worth of data on customer purchasing habits that they can use to more effectively target digital shoppers. The national grocers need to view the pandemic as a permanent reset of grocery retailing and make the appropriate investments to succeed in the post pandemic world.

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