How grocery retailers are getting ready for the holidays

by | Sep 22, 2015

Q4 is a big quarter for groceries, thanks to the holidays—meals, baking and general merchandise. From a grocer’s perspective, there are three things happening that will make Q4 2015 the biggest quarter for them.

  1. More Grocery Stores Are Offering Products That Aren’t Food Related

grocery-shoppersLarger grocery chains are bringing general merchandise into their stores, clearing out a couple aisles for kitchen items like blenders and plates, or paraphernalia from local sports teams. Grocery stores should begin preparing for the change and start thinking like a traditional retailer, not just a grocer. It means planning ahead to get products into distribution centers, and knowing those products might have a longer lead time than a grocery retailer might be used to.

  1. Bakers Are Using More, Buying More Often

Bakers do a lot more baking during the holidays than any other time of year. Not just personal home bakers, but commercial bakers and in-store bakeries. Regardless of who is doing the baking, grocers know to expect an increase in the sales of bakery items and supplies.

Throughout the season, consumers increase their demand for traditional baked goods as well as specialty or seasonal treats such as pumpkin pies or holiday cookies. They’re buying commercially produced items for convenience, as well as produce, baking supplies, dairy, and so on for their at-home baking. Grocery retailers will have more spikes of activity where they need more ingredients and supplies necessitating or to more deliveries during the week, sometimes even a couple times a day.

This adds more complexity to the grocery supply chain. Their vendors might be co-ops or companies that cover a particular region, and their professional bakers may even reside 4–6 hours away. They’ll be asked to deliver more often to keep up with demand. Of course, that means the farmers and producers will even have to increase their supply as well, just to keep up with the increased demand.

  1. Grocers Acting as Pickup Locations

This season, we are seeing grocery retailers partner with other retailers, acting as alternative pickup locations. For example, a consumer places an online order from a general merchandise retailer. One of the fulfillment options may be to pick up at their local grocery store later that week. This is advantageous in rural areas that don’t have big retail stores nearby. It can be a time and money saver, as well as give consumers another reason to stop by their local grocery store. They may even buy something in the store after picking up their order. Major retailers including Target and Walmart have both announced grocery pickup and/or delivery services this fall.

For more information on helping your grocery retail stores prepare for Q4, please contact SPS Commerce. Even this close to the holiday season, there’s still time to get your supply chain ready for the increased products and traffic coming to your store and website soon.

Scott Bolduc

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Execute Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc

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