Grocery sales increases during the COVID-19 pandemic are misleading, a new study released by the Food Marketing Institute has found.
Though sales for groceries have increased by double digits in percentage terms, most grocers continue to grapple with tight profit margins and face the added pressure of restaurants and the food service industries gradually reopening.
In Seattle, for example, a City Council-approved “hazard pay” ordinance prompted QFC to announce it was closing two stores because the company could not absorb the higher payroll expenses.
Not only have food shortages increased prices for grocers. Grocery companies have encountered new expenses for personal protective equipment, cleaning and sanitation, benefit expenses and new online delivery expenses.
The U.S. food sector has spent nearly $24 billion on COVID-19 pandemic-related costs. Most companies expect lower sales and profits this year, Supermarket News reports.