Sun | Jul 12, 2020

Grocery market adjusts - Online sales, home deliveries rise with social distancing

Published:Wednesday | April 8, 2020 | 12:17 AMKarena Bennett/ - Business Reporter

Internet shopping and home deliveries are fast becoming the new ways to stock up on grocery items across Jamaica in the wake of stay-at-home directives to slow the spread of the coronavirus (COVID-19).

And for those shoppers who still want to make the trip, Hi-Lo is willing to do kerbside deliveries outside its supermarkets.

Traditional grocery shopping habits are changing under the culture shock of social distancing and attendant Government policies that mandate no more than 10 persons gathered in one place at any time, and more recently, a reduction in work hours due to the nationwide curfew as the number of confirmed cases in the country edges towards 60.

But the impact of the virus and its restrictions have led to greater changes in the business model of some grocery suppliers than others.

Listed company Everything Fresh Limited in recent weeks found itself creating a home-delivery service as an added medium to attract retail customers, after its major distribution network – the hotel sector – began shuttering operations.

The company, which is a major importer and distributor of cheeses and other dairy products, seafood, meats, fruits and vegetables and dry goods, traditionally retailed goods through supermarket chains and restaurants across the island, and on a smaller scale, through a retail office at its Marcus Garvey Drive facility.

But now, Efresh is looking for new business through a call-and-delivery service at its Kingston office.

“We’ve always had a walk-in business at Marcus Garvey Drive, and we also had a social media presence as well, so we’ve been building on those contacts,” Chairman Gregory Pullen told the Financial Gleaner.

EFresh has fast-tracked some products it had in the pipeline to help revenue numbers and has also ramped up its supply of goods to supermarket chains across the island.

“We have a line of bottled water and juices which are about to start,” Pullen said, but was tight-lipped on when the products would hit the market.

In the interim, Pullen continues to assess EFresh’s impact from the fallout for the hotel industry, where the Caribbean’s largest hotel chain, Sandals Resorts International, expects to remain closed until May, and other large and small hotels have been scaling back. Jamaica is expecting the hospitality sector to take a $76-billion hit for the 2020-2021 fiscal year, owing to the severe impact of the dreaded COVID-19 on travel around the world.

Derrimon Trading

Another listed company, Derrimon Trading, had its online and home-delivery infrastructure in place long before the pandemic hit Jamaica, and even thought of upgrading its platform to include a virtual shopping initiative, where its customers could see and interact with digitally created shoppers and salespersons in a digital replica of its subsidiaries, Sampars and Select Grocers.

Over the past month, chairman and CEO of Derrimon Trading, Derrick Cotterell, says Sampars has seen a 300 per cent increase in online sales while Select Grocers has also seen an uptick in the number or orders being texted in to the company for home delivery.

Initially, the grocery operations saw an increase in customer volumes in-store but that has since normalised, and now the growth is manifesting elsewhere, says Cotterell.

The e-commerce platform has given the company flexibility, he said.

“Our online business has been going very well, and we also have a system where customers can text in their orders and have the goods delivered,” Cotterell said.

Like the Derrimon companies, two weeks after Jamaica confirmed its first case of COVID-19, large grocery chain Hi-Lo saw significant uptick in-store sales from shopper’s panic-buying grocery items.

That demand has since shifted to more home-delivery services for the corporate grocery chain giant, and Hi-Lo is now looking to formally introduce delivery service to an additional three stores.

“All of our stores have been delivering on an ad hoc basis, but now we are expanding to create three new store hubs to satisfy demands for delivery and kerbside services for all of Kingston and St Andrew, St Catherine and Montego Bay, and we expect to have that operational after Easter,” Cathrine Kennedy. general manager for Hi-Lo Food Stores, told the Financial Gleaner.

“Based on the readings that we are doing, we think that, unfortunately, COVID might be with us for a while and people will create new habits coming out of this process, and so we want to be able to satisfy the needs of customers by giving them different solutions on how they can shop,” she said.

Although food is always in demand, the grocery market is facing similar challenges as other businesses, that is, they are not allowed to have more than 10 shoppers in their stores, they have to provide sanitisers for customers and staff at a cost to the business, and as social-distancing protocols become the norm, persons are less inclined to visit public places, which has driven down in-store customer traffic for businesses.

It’s serving to drive innovations and the development of expanded service channels.

For Hi-Lo, that has seen the addition of kerbside delivery, which allows for customers to email or text in orders which are then packaged by a customer service representative and picked up by the customers at the front of each store.

At Everything Fresh, in addition to seeking out those very supermarkets as new channels for the produce the company trades in, Pullen is also in the process of developing an e-store, in line with the new reality that it is becoming far more pragmatic for many to do their purchases online. The timeline for the store’s ‘opening’ was not disclosed.

Cotterell, meanwhile, is bracing for future fallout as the crisis progresses.

“Derrimon is doing fine in terms of our retail operation, but we know it’s not going to continue like this. We expect that as people hunker down, there will be less consumption and there are no parties happening, so we expect that to start to play in as time goes on,” he said.

Derrimon, which also carries a large distribution portfolio, is already seeing marginal declines in its distribution business in light of the school closures, and reduced business hours implemented by commercial clients, he said, but adds that for now retail sales are expected to act as an offset.