Grocery Store Trends for 2023

As grocery store retailers prepare to enter the new year, they face challenges ranging from rising grocery prices to high freight trucking costs. Retailers learned from supply chain disruptions that increasing efficiency is vital for staying competitive. From food and beverage producers to distributors and local stores, companies in the grocery store industry supply chain must respond with agility to shifting customer demands.

The recent grocery store supply issues have made many food producers evaluate their supply chain and reinvent their processes to cope with uncertainty. Looking forward, it is equally important for these businesses to prepare for changing consumer behaviors.

Trends have emerged in 2022 that will impact the strategies of both retailers and suppliers in the year ahead. Fortunately, these new consumer demands and the supply chain issues they create can be tackled with a combination of the right technology and strengthened supplier-retailer partnerships.

Here are just a few key grocery store trends for 2023. Food and beverage brands should keep in mind these changes in the grocery industry as they move into the new year.

Increased Preference for eCommerce

One of the most significant grocery store supply trends for 2023 is customers’ continued preference for eCommerce. The number of people in the United States who buy groceries online is expected to rise to 163 million by 2024, a dramatic increase over the 87 million who did the same in 2019. Many consumers are exploring new ways to obtain their everyday food and beverage items, making fewer in-store visits, and increasing their use of online options.

You can’t blame consumers for making online grocery buying a lasting preference rather than a fleeting trend. Customers can order a week of groceries online and pick them up in-store or even opt for home delivery for added ease. Having discovered new levels of convenience, grocery customers would find it difficult to revert back to only purchasing food in person.

Grocery retailers have spent considerable resources changing processes to meet consumer demand for online shopping options, despite the challenges this represents for packaged goods that often have a limited shelf life and strict traceability requirements. Food and beverage suppliers that make it easier for retailers to keep their products on the shelf until they’re purchased will become most competitive moving forward. Meeting new eCommerce grocery trends will require optimizing supply chain efficiency and inventory replenishment to ensure customers find what they need, no matter how they shop.

Automating data transmission between you and your suppliers and vendors using electronic data interchange (EDI) streamlines operations in terms of order fulfillment and warehouse management. It also eliminates errors that can cause costly delays and product losses. Using grocery supply chain integrations helps food and beverage brands work with retailers to ensure that customers aren’t disappointed by stockouts, even when demand increases.

The Need to Rethink Logistics and Inventory Replenishment

Another reason grocery retailers have had to rethink the way they do business is that transportation costs have risen in recent years. The producer price index (PPI) for general freight trucking reached a 15-year peak in March 2022. While the PPI has dropped over the year, prices are still higher than in 2019. Diesel fuel prices have also steadily increased over the past couple of years. Though grocery store supply chain issues are constantly evolving, 2023 is poised to bring some of the same logistical problems.

The rising cost of shipping makes poor inventory management even more costly and drives grocery stores to look for ways to minimize less-than-truckload (LTL) shipping and instead maximize truck space. Increasing supply chain visibility is essential to streamlining a complex global grocery supply chain. A lack of supply chain visibility can lead to costly overstocks or stockouts that drive customers to competitors. There is more pressure than ever for grocery stores to optimize inventory replenishment to reduce freight costs.

Grocery store retailers that have not explored advanced inventory management like collaborative replenishment solutions should invest in them now so they can be ready to meet their partners’ needs for on-shelf availability. Leveraging demand-driven forecasts helps grocery stores and their suppliers optimize orders and build better truckloads. This type of solution can also help retailers stay a step ahead of shipping complications by increasing visibility into every point along the supply chain.

Empowered Omnichannel Retailers

Every business along the grocery store supply chain has become acutely aware of the need to serve customers in brick-and-mortar stores and through reduced-touch options like curbside pick-up, BOPIS, and home delivery. To continue to meet that elevated desire for convenience in the long term, grocery retailers have added a lot of features to their inventory management practices, often offering customers near-real-time views of in-stock items.

Grocery stores that want to maximize sales can use the advanced forecasting analytics and inventory management tools that vendor managed inventory (VMI) provides. VMI gives some control over restocking to suppliers, who can use the technology’s predictive capabilities and automated alerts to keep their items in stock at ideal levels— an arrangement that protects both parties’ bottom lines. VMI helps retailers improve their demand forecasting and slim their inventory to maintain a balance between overstocking and understocking.

One benefit of enabling your business with both EDI and VMI is that it makes it much easier to add third-party logistics (3PL) partners if it will serve customers better. These technologies keep all parties on the same page so that everyone can have greater visibility of the entire grocery supply chain and make better predictions regarding exact products and when they need to be shipped.

Greater Investment in Analytics and Automation

One of the grocery store trends for 2023 that represents the most opportunity for grocery store retailers is the industry’s increasing reliance on analytics and automation. Data on customer behavior, supply chain efficiency, and supplier performance can provide powerful insights into a grocery store’s operations and provide opportunities for improvement. While grocery supply chain analytics can’t predict the future, increasing visibility highlights vulnerabilities and guides growth.

Another critical strategy for managing grocery store supply issues is automating recurring tasks and communication. Automation reduces a grocer’s reliance on manual processes, streamlining functions like order processing and inventory replenishment. EDI enables grocery retailers to automate document exchanges with their suppliers and distributors to simplify transaction processing and reduce lead times.

Get a Free Demo of TrueCommerce EDI

The top grocery store supply trends for 2023 illustrate the need for grocery stores to use technology to increase communication with their suppliers and vendors. To stay competitive in the grocery industry, having strong supply chain relationships is going to be more important than ever. By automating the exchange of data, grocery supply chain partners can increase their agility and stay in step with consumers’ increased need for convenience and choice — without sacrificing their margins.

TrueCommerce’s EDI solution automates key communications between grocery stores and their suppliers to improve collaborations and get products on the shelves at the right time. If you are wondering which solutions can help you prepare for the changing grocery landscape, TrueCommerce is here to help. To see how EDI can change the way you do business, request a demo of our EDI solution today.