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Grocers, Meet Your New Competitors

Gina Acosta, Progressive Grocer
Grocers, Meet Your New Competitors
At Johnny’s Steaks and BBQ in Salado, Texas, customers can buy a $75 quarantine package that includes ground beef, bacon, beans, milk, bread, toilet paper and paper towels.

Editor's note: This is the fourth in a series of articles on how the COVID-19 outbreak is affecting the grocery retail and food industries.

At 4Rivers Smokehouse in Tampa, Fla., customers perusing the menu on a normal day might order the restaurant’s Signature Angus Brisket Plate for $15.85 (it comes with three sides and a biscuit).

But these are not normal days.

And so in addition to smoked meats, 4Rivers customers are now able to order toilet paper, fresh milk and a dozen eggs from the menu, either in person at the takeout window or online.

4Rivers is not alone.

All across the country, the COVID-19 pandemic (and its associated closures and restrictions on movement) is turning restaurants, wholesalers, dry cleaners and other businesses that don’t usually sell groceries to the public into grocers.

As panicked consumers have cleared the shelves of many staple items at traditional supermarkets and other food retailers, restaurants such as 4Rivers and other types of businesses are selling essential groceries in the hopes of meeting demand that has overwhelmed many food retailers and generating revenue at a time when economic fortunes are uncertain.

At Johnny’s Steaks and BBQ in Salado, Texas, customers can order world-famous chicken-fried steak, or they can buy a $75 quarantine package that includes ground beef, bacon, beans, milk, bread, toilet paper and paper towels. In Los Angeles, upscale restaurant Tesse has temporarily changed its name to Tesse Market, and in addition to perishables, they are selling much sought-after items such as gloves and hand sanitizer. Good Dog, a restaurant in Houston, tweeted, "We have produce, TP, 6-Packs Beer To-Go, Family Hot Dog Packs & of course full menu for take-out, curbside & 3rd party delivery (#Favor #GrubHub #UberEats)!"

It seems as though, at least for now, America is going back in time, to when consumers shopped their corner store for groceries. But this time, the corner store selling groceries might be a coffee shop or a movie theater.

Karl Kuby Jr. tells the Dallas Morning News that his family’s Kuby’s Sausage House and European Market is selling broccoli like roses on Valentine’s Day, and case after case of boneless chicken breasts disappear as fast as he can restock them.

“It feels like I’m in a bad movie,” he told the newspaper. “The grocery stores are hurting: It’s hard to get stuff stocked.” Can Kuby’s keep this going? “As long as I can be supplied with inventory,” he said.

For their part, America’s food retailers have heroically rushed to make countless changes in labor, ecommerce, stores, warehouses and logistics networks amid the coronavirus crisis as they try to respond to the surge in demand from consumers stockpiling groceries or shopping for food they previously would have eaten at school or in restaurants.

Kroger CEO Rodney McMullen told the White House last week: “There’s plenty of food and plenty of things in the supply chain. As long as customers just buy what they need and don’t hoard, there will be no problems at all.”

But perception is everything, and as long as consumers continue to see empty shelves at the grocery store, the panic will continue and many of them might turn to their local restaurant for toilet paper instead. Since the acceleration of the COVID-19 outbreak across the world, consumers are changing behaviors rapidly. The question is: Will those behavior changes continue after the pandemic is over?

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