Ryerson University’s Brookfield Institute has released a report detailing key ways in which the food retail and grocery industries are changing amid the backdrop of COVID-19.
The new report, “Shake-up in Aisle 21: Disruption, Change and Opportunity in Ontario’s Grocery Sector,” concludes that the food retail and grocery industries are transforming at greater speed and with more longer-lasting effects than in recent years.
The 43-page report by the Brookfield Institute for Innovation and Entrepreneurship (BII+E), separately assessed major trends reshaping the grocery sector and food retail work.
Digitizing grocery
Part one primarily concluded that as online grocery orders and delivery have been accelerated by the pandemic, the hiring landscape is changing.
“COVID-19 restrictions and risks have dramatically accelerated Canadian demand for online grocery shopping,” the report said. It noted that e-commerce grocery sales have increased 700 per cent since the start of the pandemic.
Increasingly, the report found, companies are looking to fill e-commerce jobs including fulfilling online orders, packing groceries, preparing food, and delivering orders, instead of traditional supermarket jobs.
“What we can expect is for the nature of jobs and the demand for different skills to shift,” said Kimberly Bowman, senior projects manager with the Brookfield Institute and one of the report’s authors. Bowman adds this should be expected to be a long-term change in grocery section employment.
It also identified concerns over the possible long-term disruptive impact of automation. The use of automated checkout kiosks is expanding and online grocery shopping is becoming increasingly popular. However, the report concluded that human staff are still needed for various roles.
“Despite the public debate about automation potentially disrupting employment for food retail workers, employers are hiring and the pandemic has only increased the need for these positions,” the report said. However, the report suggests these positions are increasingly becoming weekend and part-time work, due partly to changing consumer habits and shopping times.
Key retail trends
Part two, meanwhile, highlighted four key ongoing shifts in food retail.
Rising e-commerce
The report found that while brick-and-mortar stores are here to stay, e-commerce is surging in growth. Canadian food retailers are tackling this change in two ways. The first is a store-based approach wherein retailers draw upon inventory, labour, and space from existing stores, while the second is a warehouse-based model that normally entails a higher level of automation, different supply models, inventory planning, and delivery.
Data-based loyalty
The shift towards e-commerce continues to lead to an increase in loyalty program memberships and related data. The report found that explicit rewards programs remain important, especially for larger food retail businesses. Good loyalty programs are key for customer engagement and retention and for maximizing profits.
Pursuing a fair market
The report noted that the level of market consolidation means retailers are increasingly able to set terms, fees, and requirements when doing business with suppliers. This, in part, has led to suppliers and retailers calling for a retail and grocery code of conduct.
Supply chain efficiency
COVID-19 has intensified the need for redundancy in inventory, distribution, and labour to maintain and adapt operations, says the report. This has been seen in varied forms, including adopting a larger pool of food retail workers to meet the increased demand and mitigate the potential risks of absences. The pandemic also highlighted the importance of building shortened, local supply chains.
Looking ahead
Overall, the report concluded that the food retail industry can be a hub of innovation at a time when the foodservice industry is evolving significantly.
It also notes that the pandemic “has underscored the important role of food retail and food retail workers” and that the value offered, risk faced, and burden endured by frontline food retail jobs has not been matched in remuneration or appreciation. “The industry is being challenged by many to find a better balance between profitability, price, and their responsibility to essential workers.”
