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04/01/2021

$24B: The Cost for Grocers to Operate During Covid-19

Forced to rapidly adapt to new working conditions and changing shopper behaviors, food retailers invested $24 billion to continue operating during the global Covid-19 pandemic.

Forced to rapidly adapt to new working conditions and changing shopper behaviors, food retailers invested $24 billion to continue operating during the global Covid-19 pandemic. 

That’s according to a new report from FMI-The Food Industry Association, as reported by Progressive Grocer, that outlined how grocers invested in safety, workforce and technology to keep their doors open and serve consumers. 

As restaurants, bars and other nonessential businesses closed down or slowed operations, grocery stores were booming throughout 2020, with more consumers staying home. Grocery stores added nearly 500,000 jobs between 2019 and 2020 to keep up with the demand, and 94% of the report’s respondents said they had job openings--another 100,000 jobs.

The most expensive investments included $12 billion allocated to increases in payroll and incentive pay; $5 billion in increases in benefits; and a whopping $3 billion in cleaning and sanitation supplies, labor and other related expenses.

Smaller operators, or those with 10 stores or less, were hit harder than bigger operators when it came to investing in personal protective equipment and other safety measures. Small operators paid an average of $50,000 per store for PPE, while larger operators spent just $24,000 per store, the report found. Food retailers are also investing tens of millions to administer Covid-19 vaccines.

“We all remember the uncertainty and anxiety that defined the initial weeks of the pandemic, as virtually every aspect of our daily lives changed seemingly overnight,” Leslie G. Sarasin, president and CEO of Arlington, Virginia-based FMI, said in a statement. “Since that time, food retailers and our industry’s nearly 5 million dedicated employees have kept Americans fed and shelves stocked while providing a much-needed sense of normalcy for the communities they serve. This report offers new insights into how food retailers have responded to the needs of their customers and communities throughout this unprecedented time.” 

See the full story at Progressive Grocer.