Grocery Stores That Might Not Survive 2021

Retailers across the globe are facing massive declines in sales due to the 2020 economic downturn. Many grocers, on the other hand, have thrived in the stay-at-home pandemic while others are facing closures to balance out the books. NBC reports the U.S. grocery sector revenue has risen by as much as ten percent year over year in 2020, according to a consulting firm. That rate may shrink to two to five percent next year if restaurants open back up and a COVID-19 vaccine allows people to emerge from their homes. Experts predict the profits could even drop by as much as seven percentage points in early 2021. As more people cook at home as a result of budget or safety concerns, grocery stores are more important now than ever.

In North America, Forbes reports around $125 billion in retail sales have shifted from general merchandise retailers such as department stores, apparel, and other hard goods to grocery, warehouse clubs, and online options. Translation: We've all relied heavily on Amazon Prime and Instacart. Closed stores have also contributed to unemployment across the retail sector. Grocers are still not out of the woods thanks to what looks like another turbulent winter season. Not all are expected to fare well. Here are the grocery stores that may not survive the next year.

Family Dollar is a discount grocery store retailer found all over North America. At least, it used to be. In 2019, CNBC reported the Dollar Tree closed up to 390 of its Family Dollar locations. As part of the massive transition, the company moved to open, close, and relocate hundreds of its stores in order to stay afloat. In just one quarter, the company lost $2.31 billion compared to a profit of about half that amount the year previous. Essentially, the grocer took a huge turn for the worse.

The news outlet found that same year the company owned a staggering 7,001 Dollar Tree and 8,236 Family Dollar stores across the U.S. and Canada. The brand also planned to renovate another 1,000 locations after its losses. Upgrades included around 400 stores receiving larger freezer and cooler sections, as well as certain stores selling alcohol. The parent company also rebranded another 200 stores from the Family Dollar name to Dollar Tree.

Family Dollar received more bad news when a Family Dollar employee in Corinth, Maine, closed the store claiming poor treatment. The now-former employee put up a pink sign reading, "We quit! Bad company to work for," to the surprise of both customers and the company. Discount stores continue to be popular, especially during economic downturns when people are low on cash or facing unemployment. RIS News found even though Dollar Tree expects to slow down its store openings, 2020 earnings have been higher than expected.

Shutdowns caused by COVID-19 outbreaks and fear of protests have become the norm in 2020. Granted, grocery stores such as Sam's Club temporarily shutting its doors is only a minor inconvenience in these cases. The Walmart-owned membership warehouse, however, needs to be even more strategic due to its spotty history. In 2018, Sam's Club closed 63 of its stores without warning — especially for its employees who were suddenly out of a job. Media outlets found out about the closures from employees who were left out on the street. Even worse, corporate spokespersons stayed quiet about the whole process. And we thought 2020 was rocky. 

Sam's Club has experienced turbulence well before the abrupt closures. The membership retailer started having trouble back in 2015 when revenue fell flat. Ironically, the megastore known for using loss leaders (also known as purposely losing money to snuff out the competition) built its business model to appeal to small business owners. The model assumed small businesses would shop at the warehouse to stock their stores.

Instead, most entrepreneurs paid for memberships to shop for bargains only for personal use. In an attempt to save its remaining stores, Sam's Club has made major overhauls to its business model in the following years. Yahoo Finance reports curbside pick-up for all members, instead of only premium cardholders, is one move to stay relevant in the wake of the pandemic. Sam's Club still operates around 600 stores across 44 states in the U.S. and Puerto Rico.

Grocery store conglomerate Southeastern Grocers is unloading multiple brands as we head into 2021. Supermarket News found SEG operates 550 grocery stores in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina. It's umbrella company owns Winn-Dixie, BI-LO, Harveys, and the Fresco y Más brands.

Harvey's Supermarket is on the chopping block with SEG unloading 30 stores in Florida, Georgia, and the Carolinas. Food Lion said the store banner conversion is slated to be made over a staggered period that is expected to complete in April 2021. With the transfer, the Food Lion parent company will have nearly 700 stores in the Carolinas and Georgia. Food Lion brands can also be found in the Mid-Atlantic, Northeast, and New England regions with more than 77,000 employees. 

Local station Fox 31 News reported at least 16 of the Harvey's stores will be rebranded in Southwest Georgia. On a positive note, Food Lion plans to hire around 4,650 associates to serve customers at its 62 new stores. Georgia shoppers will be left with 28 Harvey's locations in the state. Food Lion representative also encouraged the laid-off employees to reapply to any of the Food Lion locations. A "gee thanks" might be in order while adding to the retail carnage of 2020. 

Kroger is the nation's largest grocery store chain. Kroger is also one of the largest grocery chains in the Indianapolis area. The Indy Star found the 66-year-old store in Broad Ripple faced competition from an upscale market, seasonal farmer's market, and a health food store. The mega brand decided to close the strained store in the Broad Ripple neighborhood. Kroger closing means fewer options for community shoppers.

Kroger is also closing another store in Springfield, Ohio. The Cincinnati Business Courier reported one Greater Cincinnati Kroger store will close, as will another Kroger store near Dayton. The partner station in Dayton found that this is the third location in the Springfield area to close in recent years. Springfield's mayor issued a statement speaking out against the closure instead of choosing to improve the store. Closures and layoffs aren't unusual for the widespread grocer. In 2019, the Knox News found Kroger cut hundreds of local management jobs nationwide.

Like many retailers adapting to a new economy, the brand plans to focus more on technology and infrastructure in its existing stores.

Retailers across the country are taking a bit hit during the economic downturn. Shops are shutting their doors, and layoffs are becoming commonplace. Sales for (most) grocers are looking up due to restaurants closing and forcing more people to cook at home. Forbes reported that Albertsons is the only grocery store that gets a very high risk of default by RapidRatings's financial health ratings.

At the start of 2020, the New York Post reported that the widespread supermarket hit a few bumps when it announced it wouldn't be able to cover pension plans as soon as 2021. This announcement — and potential legal action if it doesn't meet its financial commitments — came right as the grocer wanted to go public. As a parent company to Safeway, Shaw's, and Acme chains, Albertsons wouldn't be able to meet around $565 million in group pension plans, covering around 50,000 supermarket workers in the Washington, D.C., area.

Grocery stores are certainly making lemonade out of the lemons of the pandemic. Business is booming — for now. Like many grocers, Supermarket News found Albertsons is being forced to cater to an online audience and innovate with curbside offerings. Buy-online, pickup-in-store, and curbside pickup are also services retailers in all industries will need to offer in order to prosper in the new normal. Making sure you can pay your bills also seems like a great idea for any business.

Target enjoys somewhat of a cult following in the U.S. but has seen better days down under. Yahoo! Finance reports that Target Australia will be restructured as Kmarts across the country. Parent company Wesfarmers found the current model "unsustainable." Through 2021, between ten and 25 "large format" Target stores and 50 Target Country stores will be closed indefinitely. An additional ten to 40 large Target stores and 52 Target Country stores will be converted into Kmart.

In case you're wondering how the impulse-buying haven called Target fail so miserably in Australia, Target Australia is actually a separate company despite twinning with the name and logo. The two also share the slogan, "buy more, pay less." Despite the likeness, The Daily Mail revealed upwards of 167 stores could close. Wesfarmers also owns Kmart, another familiar yet different Australian brand. The Target closures are expected to result in up to 1,300 jobs lost through 2021. The rebrand, on the other hand, might help revive sluggish sales.