Just like the U.S., supermarkets in China saw a sharp uptick in business as COVID-19 infections spread, shopping malls and restaurants closed and people had to rely on grocery stores for their everyday needs, said Zhe Zeng, IGA’s deputy representative to China.
Over the past two months, the majority of orders came through e-commerce as consumers hunkered down in their homes, and retailers had to develop special delivery protocols in order to service heavily quarantined communities, Zheng wrote. Shoppers focused on buying necessities such as fresh vegetables, condiments, poultry and meat. Sales of vegetables alone jumped by two to four times as a result of the rush by consumers to stock up on items needed to prepare meals at home, Zheng noted.
Chinese consumers affected by the nation’s response to the coronavirus became less price-conscious when shopping for essential products and were uninterested in products they perceived as unnecessary, such as items related to “luxurious indulgence, vanity care, or recreation.”
The behavior of grocery shoppers in China, which was hit by the coronavirus before the United States and is at a more advanced stage in dealing with the outbreak, offers a preview of what could happen as this country moves into lock-down mode and consumers stay home.
With its corporate headquarters located in Wuhan, the epicenter of the pandemic, and with 1,000 locations across the country, IGA China has been on the front lines of the coronavirus outbreak. Just as in the United States, where bare supermarket shelves have become a common sight, grocery stores in China initially experienced panic buying as people rushed to stock up on basic goods amid uncertainty over how the crisis would unfold, according to Zheng.
At the start of the outbreak, shoppers in China especially focused on buying cleaning materials, packaged and frozen goods, water and other items they perceived as essential to survival, IGA said. But as Chinese authorities imposed quarantines and people were forced to settle into a routine that demanded cooking at home, people turned to buying perishable items like fresh vegetables and meat, forcing retailers to find creative solutions as they tried to meet extraordinary demand for these types of products.
Grocers turned to delivering products to people unable to leave their homes, and chose products to offer people based on availability. In order to reach quarantined communities, grocers had to specially bundle orders so that they could be delivered in bulk and then separated out by household once they reached their respective communities.
To expand supply and deal with shortages, IGA’s Zeng recommended that grocery stores try to purchase food from restaurants unable to operate.
IGA’s experience in China offers a glimpse of the labor shortages grocers could face if workers get sick, are quarantined or simply decide not to report for work. He wrote that a 30% absenteeism rate in stores was not uncommon, and that support positions like supply loaders and sanitation workers had rates of as high as 80%. This forces the people who are able to get to work to deal with unpredictable shifts and long hours, Zheng noted.
Supply chain issues have been a key challenge for grocery stores in China as the country dealt with the coronavirus, especially because many truck drivers were sidelined when they returned from areas hit hard by the virus, according to Zheng. Given the driver shortage, most shipping capacity has been dedicated to transporting products people need to cope with their need to largely eat at home.