Pandemic-driven grocery store-sales boom relents in US

Sales at the biggest grocery store chains in the US have slowed compared with the height of the novel coronavirus outbreak earlier this year, as shoppers have stopped panic-buying and stockpiling goods.

In March, shortly after President Donald Trump declared a national emergency over the COVID-19 pandemic, consumers rushed to stores, snapping up food, drinks and toilet paper.

Many of the nation's governors then declared a lockdown in their states to slow the spread of the virus. That drove up grocery sales at big retailers like Kroger, Target, Costco and Walmart. Online grocery sales also surged year-on-year.

Six months later, data from the US Census Bureau show that consumers have settled into a routine and are adjusting their spending habits. In August, grocery and beverage stores were down 1.2 percent month-over-month but up 8.3 percent this year compared with 2019.

Oppenheimer analyst Rupesh Parikh noted the widespread change in consumer behavior in a note to clients about Costco: "The food categories moderated for the first time in recent months, further pointing to the end of the grocery boom."

Grocer giant Kroger, the largest US supermarket chain by revenue and the second-largest general retailer, said grocery sales were up by 14.6 percent during the second quarter ended Aug 15, down from 19 percent in the first quarter. It had digital sales growth of 127 percent.

Kroger CFO Gary Millerchip said on a call with analysts last week: "Customers are now adapting to some level of a new normal."

Kroger also runs supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano's, Fry's and others, with 2,750 stores altogether.

Analysts noted that consumer spending appeared to taper off after a second round of stimulus checks failed to materialize from the federal government. The extra $600 in weekly unemployment benefits in the first stimulus package, known as CARES, also dried up.

Meanwhile, as restaurants in many states reopened last month and continued to offer takeout and curbside dining, patrons began to eat out again and cook less.

Walmart CEO Doug McMillon said that the retailer had benefited after Americans got government stimulus checks from the CARES Act. But when those funds ran out, sales steadied.

McMillon said the retailers' same-store sales in the US were up 9.3 percent in the second quarter, led by general merchandise and food. Walmart offers grocery pickup services at 3,450 locations and same-day delivery at 2,730 stores.

"Over the past several months, consumers have responded well to federal relief measures that have supported the recovery, so it comes as no surprise that they would take a pause on spending as some of these programs tapered off at the end of July," National Retail Federation President and CEO Matthew Shay said in a statement. "We continue to advocate for additional stimulus measures to help the economy recover."

Online grocery sales fell from a record high of $7.2 billion in June to $5.7 billion in August, according to a report by consulting firm Brick Meets Click.

Whole Foods CEO John Mackey believes that online grocery sales will soon start to level off as life gets back to normal and people feel "safe".

As Americans continue to live and work from home, they are buying comfort food. Sales of frozen pizza were up 18.6 percent during the last week of August, and frozen desserts were up 15.8 percent, data from 210 Analytics and IRI market research firms showed.