Since the start of the coronavirus pandemic earlier this year along with the resulting “shelter at home” and “social distancing” orders for U.S. citizens, health and natural food retailers have experienced (and reacted to) many challenges to their ability to service customers—and for some stores serious threats to the survival of their businesses.

While natural product stores were rightfully classified as “essential” (in most states) and thus were allowed to stay open during the coronavirus economic shut-down, this certainly did not mean that “business as usual” was an option for any industry retailers.

In a recent nationwide survey of natural product retailers commissioned by Vitamin Retailer (VR) magazine and conducted by Signet Research, store owners and managers detailed a number of ways the coronavirus has impacted their businesses, and described how well they have “weathered the storm” of the unprecedented COVID-19 pandemic.

A few of the survey highlights include:

• • 82 percent of health food retailers instituted curb-side order pick-up and/or delivery services in order to serve the needs of their shoppers since the coronavirus began.
• • More than 80 percent of stores have implemented enhanced store cleaning and sanitizing procedures as a direct response to the pandemic.
• • Virtually all (99 percent) of the stores surveyed said they have experienced product out-of-stocks and/or delivery delays due to the virus.
• • When asked to assess the overall threat of the coronavirus to their retail business, 10 percent of natural product retailers said the virus presents an “extremely serious” challenge to their ability to stay in business, while 38 percent said it presented a “moderately serious” challenge to their store.
• • And while 95 percent of health food stores have been able to stay open since the start of the coronavirus, nearly half (48 percent) of the retailers surveyed have operated with reduced store hours.

Open For Business?

According to the VR Coronavirus Retailer Survey, 43 percent of natural product retailers have stayed open during the pandemic with regular store hours, and an additional 4 percent even stayed open with extended store hours.  However, as mentioned, 48 percent of the health food stores surveyed stayed open but with reduced store hours, while another 5 percent of stores were fully closed due to the virus.

A silver lining for many natural product stores has been an increased consumer demand for dietary supplements since the virus outbreak began.  The survey found, for example, that sales of dietary supplements have increased “significantly” at 20 percent of health food stores nationwide, while another 28 percent of retailers reported their supplement sales have increased “somewhat.”  Combined, 48 percent of the stores surveyed therefore experienced a sales increase for dietary supplements, while 12 percent of the retailers noted their overall supplement sales have stayed about the same.

Among those retailers seeing a supplement sales increase, the majority (60 percent) said sales had increased between 10 to 25 percent.  Another 26 percent of these retailers said their supplement sales had increased by more than 25 percent since the pandemic began in the U.S.

But for 40 percent of all health food stores surveyed, sales have actually decreased due to the coronavirus, with 23 percent of the stores reporting sales have decreased “significantly” and another 17 percent reporting their sales have decreased “somewhat.”

This “tale of two cities”—with some stores benefitting from significant supplement sales increases while others have experienced a sales decrease—can likely be traced to several factors, most notably the relative severity of the virus outbreak in certain areas of the country (such as New York City) compared to others, and the resulting desire (or lack thereof) by consumers to shop in person at their local retail store, whether it was kept open or not.

And unfortunately for many health food stores, the lack of an online sales presence (see below) most likely hurt their recent sales results when many supplement consumers chose to stay home and do their shopping on the internet due to the coronavirus.

Got Zinc?

It comes as no surprise that one direct result of the COVID-19 pandemic has been an increased consumer demand for certain nutritional supplements.  But exactly which supplements have gotten a coronavirus sales bump?

The VR Coronavirus Retailer Survey asked natural product retailers to identify the specific dietary supplements that have increased in sales at their stores since the start of the COVID-19 pandemic.  Named most often by a whopping 92 percent of survey respondents was zinc—a mineral known as being key to immune system health, not to mention a dietary supplement touted by none other than President Donald J. Trump!

Coming in second and just behind zinc was vitamin C, with 87 percent of those retailers surveyed reporting a sales increase for vitamin C since the start of the pandemic.

Other supplements identified most often as experiencing a significant sales increase due to the virus were elderberry (named by 85 percent of retailers), colloidal silver (78 percent), immune system formulas (76 percent), and vitamin D (74 percent).

Rounding out the list of nutritional supplements most often identified as increasing in sales as a result of the coronavirus were echinacea (named by 53 percent of stores), olive leaf (43 percent), and probiotics (39 percent).

While the survey found that only 31 percent of brick-and-mortar health food stores sell products online, for most retailers that do engage in internet sales the coronavirus has caused a significant increase to their online business.  More than two-thirds (68 percent) of natural product stores that sell online said their internet sales have increased since the start of the pandemic.

But 69 percent of the health food stores that were surveyed said they did not sell any products online, eliminating any chance they would have to service the many consumers who have avoided in-person shopping activities since the pandemic began.

Adapting To Change

As previously noted, health and natural food stores have been forced to change and adapt in many different ways due to COVID-19.  For example, the survey found that more than eight in 10 health food stores have increased their cleaning/sanitizing procedures due to the coronavirus, and a similar 82 percent of stores began offering curbside pick-up and/or delivery services.

What other changes have occurred in the way health food stores conduct business since the start of the pandemic?  According to the VR survey, 66 percent of stores have required all of their employees to wear face masks, while 21 percent also made their employees wear gloves.  But only 34 percent of natural product stores are requiring their customers to wear face masks, the survey found. (Ed. Note: requirements for wearing face masks in public during the pandemic varied from state to state.)

In addition, with store employees being on the “front lines” during the virus outbreak, the survey found that 42 percent of natural product retailers have installed protective plastic shielding at store check-out areas, while 39 percent of stores reported giving their staff pay increases.

Some 30 percent of the health food retailers surveyed said they had donated food or products to local charities since the virus began, according to the survey.

PPP To The Rescue?

The U.S. government’s Payroll Protection Program (PPP), though initially beset with implementation problems and alleged favoritism toward large companies, has helped many small businesses keep their staff employed and on payroll since the virus outbreak.  However, the VR Coronavirus Retailer Survey found that a significant number of health food stores have chosen to not apply for a PPP loan.

The survey showed that 54 percent of natural product retailers applied for a PPP loan, but the remaining 46 percent of health food stores did not apply for the loan.

Of the retail stores that did apply for the forgivable (with conditions) PPP loan, most were successful in getting their funding: 84 percent said they had received their loan, while an additional 8 percent were still expecting to get the loan.  The remaining 8 percent of health food stores that applied for the PPP said they did not get approval for their loan application.

Perhaps more stores should have applied for the PPP loan (funds were still available as of this writing), because 21 percent of those retailers surveyed said they had been forced to reduce the work hours of their employees due to the coronavirus, while 14 percent of health food stores noted they had laid off or furloughed some or all of their employees as a result of the pandemic.

Final Thoughts

COVID-19 has undoubtedly been one of the most significant challenges ever faced by brick-and-mortar natural product retailers, in particular for small “mom and pop” stores with limited financial ability to withstand temporary business shut-downs and/or decreases in average weekly customers.

While many of the products sold at natural product stores are indeed “essential” to the health of consumers, the VR Coronavirus Retailer Survey found that only about half of all retailers have experienced any dietary supplement sales increases since the pandemic began, with four in 10 stores experiencing a drop in sales as many of their customers chose to stay home rather than go out shopping.

It remains to be seen how long the coronavirus threat will last, how soon a vaccine may be available, and how much improvement retailers may see in their sales results as states lift their stay-at-home restrictions and more consumers resume their normal activities.  Clearly, interest in many dietary supplements has greatly increased as a result of the virus, and this could translate into many new, long-term users of immune system-enhancing products such as zinc and vitamin C.

Unfortunately, some health food stores may not survive the business fallout from COVID-19.  But for those health and natural product retailers that can successfully navigate and adapt to the many new challenges they face in today’s coronavirus world, the future could be bright for their stores as consumers place a greater focus on natural products like dietary supplements to help them stay healthy.

About the survey: The VR Coronavirus Retailer Survey was conducted between May 19 and June 5, 2020.  Surveys were emailed to over 4,000 health and natural food retailers throughout the U.S., and the survey findings are considered accurate at the 95 percent confidence level. The survey was conducted by Signet Research, Inc., an independent research company.

Congratulations to Jim Lowenstern of Yes! Organic Market in Washington, D.C., who was randomly selected to receive a $250 American Express gift card for participating in the VR Coronavirus Retailer Survey.