- Grocery co-ops haven’t seen the same surge in business as traditional supermarkets as the pandemic has unfolded, with many seeing a decline in business over the last few months, the Minnesota Star Tribune reported.
- Co-ops across the U.S. saw a 5.7% decrease in sales in April and 1.4% decrease in May, according to data from the U.S. Census Bureau, the newspaper reported.
- Many co-ops were early to adopt safety standards like social distancing and limits on customers in stores, which deterred some shoppers. Additionally, experts told the Star Tribune that many people switched to larger supermarkets as they became more concerned about price and wanted the convenience of one-stop shopping.
Promoting the idea of value in this uncertain economy is a challenge for co-ops. With their limited size and scale, co-ops don’t necessarily have the same flexibility to compete on price as supermarkets do. Instead, they typically offer higher-priced specialty items and focus on organic selections and products that meet special dietary needs.
Though the data shows some struggles, not every co-op has taken a hit during the pandemic. According to Civil Eats, some co-ops have found ways to win customers. In Illinois, for example, Green Top cooperative grocery offered two-for-one milk to help a local farm that was dumping product and recorded milk sales that were 10 times higher than it typically sees.
Other co-ops have been able to keep their shelves better stocked than traditional supermarkets and continue offering fresh, local products through their vendors, Civil Eats reported.
As many Americans continue to face unemployment or hits to their paychecks, price is going to be key. And while traditional grocery sales surged as people stocked up when COVID-19 hit, they could be in for a slowdown. According to data from IRI, sales of private label products — which are cheaper than national brands and typically see increases during a recession — were up nearly 19% during the four weeks that ended May 3 compared to the same period last year, CNBC reported.
With most co-ops offering their own private label products, this shift in behavior could bring some shoppers back to the format as they look for cheaper items that also meet their health needs. Most co-ops also offer monthly or quarterly discounts for members.
Specialty grocers and health-focused banners have struggled with investors in recent months as they try to stay competitive with traditional formats. But it’s not for a lack of consumer interest. Experts have previously told Grocery Dive shoppers love the feeling of smaller stores with healthier products.