The grocery industry responds to COVID-19 and panic buying

by Chris Powell

The grocery industry has been ground zero for the COVID-19 pandemic the past week, yet it took Canada’s major grocery banners a few days to publicly address consumer concerns—during which time a wave of panic buying led to empty shelves across the country.

While U.S. president Donald Trump enlisted the leaders of major retail chains including Walmart and Target to assuage consumer fears about grocery shortages, and a group of U.K. grocers including Tesco, Sainsbury’s, Asda and Ocado took the unusual step of coming together to pen a letter urging customers to shop responsibly, there has been no unified response from Canada’s grocers.

But with Canada now in a virtual lockdown, major grocery banners—as well as some smaller chains—have been going out of their way the past few few days to reassure consumers worried about a lack of stock or potential safety issues.

“I have the utmost respect for Canadian grocers, and I’m sure they’re working feverishly around the clock to get as much supply as they can, but I don’t think it’s been communicated as comprehensively as in the U.S. and the U.K.,” said Toronto-based retail analyst Bruce Winder, co-founder and partner of Retail Advisors Network.

But with customer fears stoked by social media posts showing empty shelves and lines snaking around stores, grocers are working to reassure customers that the country’s supply chain remains robust.

“Consumers have been silly; they’ve seen too many apocalypse movies on Netflix,” says Winder. “It’s really irresponsible behaviour.”

New research, however, suggests that consumers are also increasingly anxious about the grocery shopping experience. A March 13-15 survey conducted by Angus Reid on behalf of Dalhousie University found that nearly two-thirds of Canadians (65%) are also concerned about potential health risks of shopping at a grocery store, a fear that is most pronounced in the country’s most populous province, Ontario (73%).

However Canada’s leading grocery banners have announced the implementation of several measures in recent days, including shorter hours designed to give them time to re-stock and sanitize, to designating specific shopping periods for seniors and people with disabilities.

Sobeys announced the formal rollout of what it describes as a “Seniors Shopping Hour” after the initiative was piloted by one of its franchisees in Edmonton. The program gets underway on Friday.

In a letter to customers posted to the company’s twitter page on Monday (the banner’s first post since Feb. 9), Michael Medline, president and CEO of Sobeys parent Empire Company Limited, said that the company had never seen so many customer visits in its 113-year history, but stressed his confidence in Canada’s “robust” grocery and food supply chain.

“We are working hard to keep our shelves stocked in the face of unprecedented demand for products,” he said.

The Empire-owned Farm Boy chain, meanwhile, announced on Monday that it has closed its hot bar, salad bar, soup bar and olive bars until further notice, while a tweet directed users to a letter from the senior management team, including Medline.

Longo’s posted its first COVID-19 related tweet on March 16, noting that it was temporarily adjusting store hours from 8 a.m. to 8 p.m. to allow time for restocking and sanitizing. That was followed by the announcement of a “Community Wellbeing Hour” from 8 a.m. to 9 p.m., during which the store would be open exclusively to seniors and at-risk people.

It’s not easy to find much from Metro on social. A letter from president and CEO Eric La Fleche on the company’s home page explains what the company is doing to “continue to serve you well.” He explained the steps being taken to ensure its stores are clean and safe, and stressed that products are available. “The situation is far from perfect and is evolving rapidly, but our teams are working relentlessly to make it happen and meet your needs,” he wrote.

On March 13, Loblaw CEO Galen Weston posted his first note to customers about how Loblaw Companies was responding to COVID-19.

“To start, you expect our supermarkets and Shoppers Drug Mart pharmacies to be up and operational, with healthy environments and teams ready to serve,” he wrote. That was also where Loblaw announced that it was going to make delivery options cheaper and more accessible for those anxious about visiting one of Loblaw’s stores. Steps taken include eliminating pick-up fees for its PC Express service and bringing down prices on home-delivered items.

On Monday evening, Weston followed up with a much more comprehensive letter that was notable for fully addressing the anxiety some customers felt about seeing empty shelves, either in person or shared on social media.

“First and foremost. Do not worry. We are not running out of food or essential supplies,” he wrote. “Our supply chain and store teams are responding to the spikes in volume and quickly getting the most important items back on the shelf. Volumes are already normalizing somewhat, and we are catching up.”

Twice more Weston reminded his customers not to worry—first about suggestions that prices for essential products will be raised (“This will not happen at our stores”) and again about the belief that Shoppers Drug Marts or Loblaw grocery stores could be closed down.

“Do not worry. We have been in contact with both provincial and federal governments,” he said. “We all agree that food and drug stores are essential services and we must do what we need to in order to keep them operating and serving every community in the days and weeks ahead.”

(A Loblaw spokesperson confirmed that most of the company’s 2,500 stores, both grocery and Shoppers Drug Mart, will offer special hours for seniors and the disabled, although those programs will be executed at the local level.)

The note goes on to acknowledge that the shopping experience will be different, and that Loblaw’s stores and services “will be far from perfect. But we will do everything in our power to make sure you have what you need for yourselves and your families.”

While the pandemic is likely to lead to a surge in the use of online grocery delivery services, Winder suggests the industry doesn’t have the necessary capacity to handle a sudden influx of online ordering.

“It’s nobody’s fault, it’s just that grocery delivery in Canada is in its infancy,” he said. “The world was probably caught flatfooted in terms of infrastructure and when you add on COVID-19 that infrastructure is further eroded.”

Thankfully, at least one grocery brand is taking the COVID-19 pandemic in stride. On Tuesday, the delightfully irreverent No Name twitter posted a 20-second hand-washing timer, accompanied by the simple message “stay safe.”

—With files from David Brown

Chris Powell