New Realities for the American Marketplace in the Age of COVID.

GROCERIES

Continued Dollar Sales Growth Predicted

Closing out the year and looking ahead to the first quarter of 2022, grocery manufacturers and retailers are predicting continued dollar sales growth as they navigate rising costs and supply chain challenges, make alterations to in-store space allocation, and focus on investments in digital commerce, according to two surveys by Advantage Solutions.

Among the findings:

* Six in 10 manufacturers and seven in 10 retailers expect higher dollar sales in the fourth quarter of 2021 compared to a year ago. Manufacturers and retailers agree price increases will be the top driver of dollar sales growth.

* Outside of price increases, more manufacturers than retailers say improved supply will spur growth. Retailers point to elevated levels of in-home consumption and increased consumer spending.

* To mitigate rising costs, nine in 10 manufacturers are planning or have taken at least one price increase since the pandemic started. One-half have taken one increase. One-fourth are planning or have taken a second. Nearly one-sixth are planning or have taken three or more. Most price increases have been reflected in list price.

* Manufacturers are more optimistic than retailers about supply levels. While one-third of manufacturers expect supply levels to top 90% in the last quarter of 2021, none of the surveyed retailers do.

* More than half of retailers are expanding their fresh category offering. Four in 10 plan to trim space devoted to tobacco and general merchandise.

* Manufacturers say retailers that are winning online are leveraging new shopper fulfillment options, are focusing on online shopper experience and services, and have a retail media network. Nearly all retailers surveyed say they have increased their digital investments this year.

* Seven in 10 manufacturers plan to reduce traditional trade spending in the next six months. Their top reasons include supply constraints, diverting funds to digital investments, and cost increases.

SUPPLY CHAINS

The Bane of Shipping Delays Continues

As the world experiences the second holiday season since the start of the pandemic, the shipping industry has yet to recover from the effects of COVID-19. There continues to be a dearth of cargo space, as flights have decreased and shipping via ocean cargo containers takes weeks.

During the first six months of 2021, commercial flight traffic did improve by 11% above 2020 levels, but that figure was still down 33.8% from...