Grocery shopping levels still increasing but not at frenzied levels

Traffic and basket size at local supermarkets shifted from record- breaking to more modest jumps last week, allowing the stores to replenish shelves with basics and items for Easter and Passover meals.

"The speed at which this occurred went from zero to 400 in four days," Curt Funk, senior vice president of merchandising for Lunds & Byerlys, said of the buying sprees in the past month. "We plan for many months for the Christmas surge, and this was worse, but sales are starting to level off now."

Cub, Lunds & Byerlys and Kowalski's stores are now seeing sales up 20% over normal levels compared with 200% increases earlier in March.

"The supply chain is set up to always have safety stock, but the sink got drained," said Chris Testa, president and chief marketing officer at United Natural Foods Inc. (UNFI), which purchased Eden Prairie-based Supervalu and its retail flagship Cub in 2018. "For two weeks, orders outpaced replenishing, but now the inbound shipments are exceeding the outbound."

As for shortages, toilet paper, sanitizer and wipes will continue to see spotty supplies, but there are no raw commodity shortages.

"It's just about replenishing," Testa said.

What has changed is that consumers will see fewer varieties of certain items as manufacturers ramp up. A paper supplier may limit its toilet paper or paper towels to the two bestselling varieties rather than 10 to increase production efficiency.

"You won't see lemon-scented, choose-a-size paper towels for a while," Testa said. "Milk will only be in two fat levels and you won't see it in pints for a while."

Besides the popularity of personal products, baking supplies, soups and pasta, sales of frozen pizza jumped 140% — "Super Bowl-sized increases."

Prepackaged deli meats, cookie dough and ice cream are also seeing abnormally high sales.

What about fixings for Easter, which is Sunday? While the supplies of eggs have stabilized and are expected to satisfy demand, the wholesale cost of eggs has tripled in the last month, which retailers have passed on to consumers.

The consumers' price of about $1 per dozen eggs was recently about $3. On Monday, egg prices on the Urner Barry market index fell by about 8% and will likely continue to fall as they return to near-normal levels.

"Eggs are definitely coming back into supply, and demand is starting to abate," said Mike Stigers, CEO of Cub Foods. "The supply cycle that used to go to food service is now going to store and home inventories."

Supermarket analysts expect COVID-19 to have a dramatic effect on Easter gatherings, from fewer people sitting at each table to what is being served.

"I think people will be buying less and eating less and be using what they can find in stores or have already stockpiled," said Phil Lempert, a supermarket analyst who founded SupermarketGuru.com.

One of those stockpiles is ham. Two weeks ago, ham sales were up more than sixfold compared with the previous year. Last week, they were up more than 400%.

"People are clearly stocking up earlier than normal for the holiday," Lempert said.

Still, ham remains in good supply in stores, executives said.

"Easter dinner could create some interesting dynamics," said Funk of Lunds & Byerlys.

Instead of a family gathering of about a dozen people, there may be three smaller gatherings. Plus, Easter brunch is traditionally a popular restaurant meal.

If people are waiting until the weekend for Easter meal shopping, they may want to move up the shopping trip, and especially add time for online orders.

The number of Twin Cities consumers using curbside pickup or delivery has tripled or quadrupled, the executives said, with the average wait time ranging from one to five days.

Randy Edeker, chief executive at West Des Moines-based Hy-Vee, said that online ordering already was growing dramatically before the coronavirus but he believes it will expand even more afterward.

"It's evolving so fast we're figuring out what's the right plan for customers," he said.

Last month, Hy-Vee announced it was closing its four online fulfillment centers including one in Eagan, laying off 327 workers.

"The customer is shifting to wanting groceries in two hours or same-day pickup. And they want their groceries to come from the store they pick," he said. "The customer is in charge, and fulfillment centers don't work in that model."

In-store customers seem divided about using a cashier or a self-service lane, but Edeker thinks the self-service lanes will be more popular than ever as consumers watch their social distancing.

"Use of self-checkouts is definitely up for shoppers who want less interaction," said Funk.

At Kowalski's, people are buying more at one time, said Mike Oase, chief operating officer. "It's all part of social distancing."

Are people economizing for Easter dinner? Lempert said it will depend if consumers start getting their most recent card statements this week.

"Those who overspent in the hoarding process will have sticker shock and start forgoing some items they would have normally bought," he said.

Funk said that hadn't started at Lunds & Byerlys as of last week.

"We're hoping for even bigger sales," he said. "We're not cutting back on anything. It's too big of a holiday to disappoint anyone."