2023: A Year of Adaptation and Challenges

The supermarket industry went from a difficult 2022 due to the aftermath of the COVID pandemic and inflation to 2023, characterized by grocers’ talent to adapt to change despite challenges to their profit margins, labor shortages and slow growth of their businesses.

As indicated by global firm McKinsey & Company in its report “The State of Grocery Retailing in North America 2023,” retailers that create unique experiences and offer greater convenience are positioned to compete on more than just price. Identifying what consumers value most and offering flexibility are critical to positively ending 2023.

One of the most critical moments of 2023 was the announcement of C&S Wholesale Grocers’ deal to buy 413 supermarkets from Kroger and Albertsons. Another key point was the rapid change in customer shopping habits after the end of the government stimulus for COVID-19.

Related Article: 2022 Year in Review

In 2023, consumers sought more savings by taking advantage of the overflow of store brands due to the pandemic. To compete with online sales, retailers moved away from EDLP sales programs. EDLP (Participatory Local Development Strategies) sales programs began engaging in shorter-term, more bottomless deals.

For independent supermarkets, advocacy work in Washington was instrumental in advancing policies that benefit the industry. In particular, there was significant momentum around bipartisan dialogue recognizing the need to preserve a level playing field for supermarkets of all sizes and strengthening antitrust laws.

In this recount of the most relevant events for the food and beverage industry during 2023, a group of industry leaders shared with Abasto their opinion of the most important things that happened this year.

What opinion leaders think about 2023:

Eric Stover, President, Heritage Grocers Group

“Our customer’s discretionary income has decreased, impulse and fringe purchases are down, and product price sensitivity is up.”

Eric Stover, President, Heritage Grocers Group

“Creating a space where the customer has a sense of belonging is key to combating e-commerce.”

Oscar Gonzalez, Co-Chairman, Northgate Gonzalez Markets

Oscar Gonzalez, Co-Chairman, Northgate Gonzalez Markets
Samuel Collado, President, National Supermarkets Association (NSA)

“The pandemic transformed the way we operate, emphasizing the importance of security, convenience and accessibility.”

Samuel Collado, President, National Supermarkets Association (NSA)

“Four big chains control 69 percent of the nation’s grocery sales right now. An unfortunate result of this market dominance is the emergence of food deserts.”

Laura Strange, senior VP of Communications and External Affairs, National Grocers Association (NGA)

Laura Strange, senior VP of communications and external affairs, National Grocers Association (NGA)

“Regional brands and specialty brands are making their way back into the market and are in favor as the consumer seeks new trends and offerings vs a value play to private label.”

Andy Epstein, CEO at B&A Food Brokers