The COVID-19 lockdown has caused massive disruption in the food and grocery supply chain. Not only are manufacturers and distributors finding it difficult to supply products to retailers, but also the e-commerce grocers are unable to meet the heightened demand. To begin with, transporters were not allowed to ship essentials. It was followed by a massive shortage of manpower. The only ones which have risen to the occasion are the neighbourhood Kirana stores. Since distributors were unable to supply, most kirana store owners have been hopping from one distributor to the other trying to pick up as many grocery products as they can. "We are unable to open our stores early in the morning as we have to go to the distributor to pick up supplies ourselves. None of the big companies are sending their distributors,"says Dharmesh Patel, a kirana store owner in suburban Mumbai.
"The kirana stores are doing a much better job at ensuring that essentials are available to the consumers. They are physically picking up products from our warehouses and distributors," agrees R.S. Sodhi, MD, Amul. No wonder grocery shopping in kirana stores during the lockdown has witnessed a 39 per cent growth, as per a recent report on Indian food retail by McKinsey during the COVID-18 pandemic. The report says that 29 per cent of shoppers have shown an intent to go back to their good old neighbourhood kirana stores even after the pandemic subsides. The demand for large format modern retail supermarkets dipped by 5 per cent, and the report says that post the pandemic there could be an 8 per cent increase in shoppers.
The pandemic has led to a lot of consumers rediscovering their culinary skills, which has led to more consumers buying food ingredients from grocery stores as opposed to ordering food from restaurants. The McKinsey report says that groceries purchased from grocery stores during the lockdown has gone up by 53 per cent, while ordering from restaurants saw a growth of 11 per cent. The report says that even after the pandemic subsides there will be a 48 per cent growth in consumers buying grocery to cook at home.
While bulk of consumers preferred shopping at their neighbourhood grocer, they also gave lot of importance to the hygiene at those stores. Availability of hygienic services at the stores has been the first preference of over 50 per cent, while 38 per cent gave more preference to the assortment available at the store, says the report. The important factors that will determine store selection over the next four weeks would be stable availability of fresh foods products (39 per cent), store location (39 per cent) and number of shoppers in the store at a given time (38 per cent).
The McKinsey report also shows a distinct trend of consumers willing to go out of their comfort zone to try out newer products and brands. Over 65 per cent of consumers have switched from their regular brands. In fact, Arvind Mediratta CEO of Metro Cash and Carry, in a recent interview with Business Today, said that COVID-19 has compelled consumers to try out newer brands. At kirana stores, die-hard fans of brands such as ITC's Aashirvad Atta are also open to buying the unbranded atta sold by the grocer. This is largely due to the unavailability of their preferred brands. The McKinsey report, however, says that 89 per cent of the respondents said that they would go back to the brands they usually purchased.