Conservative shopping by millions of American households is pressuring food stores to excel on shopping experiences, price, and product quality and assortments in order to earn trips.
Tighter food spending by recession-hit families has raised the performance bar for stores. Consumers are using online resources to find their best choices. And stores rely increasingly on technology to help deliver the value, variety and services it takes to compete for shoppers today.
These observations appear in the Food Marketing Institute (FMI) 2012 U.S. Grocery Shopper Trends report, issued this summer. They embody some of the mega-trends that FMI feels will shape the competition in grocery retailing over the next few years.
Trend 1. Shoppers adopted new value-seeking habits during the recession, many of which they plan to maintain permanently.
• For example, 78% of shoppers surveyed for the report said they "seek discounts often and will continue shopping this way even after times get better" vs. 61% who said they "always shopped this way and still do." This translates into 19 million more U.S. households shopping this way since the recession.
• Similarly, 78% said they are "comfortable buying store brands and will continue shopping this way even after times get better" vs. 64% who said they "always shopped this way and still do." This translates into 16 million more U.S. households.
• 55% "accept living with less" and will exhibit this behavior going forward vs. 42% who "always shopped this way and still do." This translates into 15 million more U.S. households.
Trend 2. Technology is changing how people shop for groceries on at least 25% of their shopping trips.
• 52% of survey respondents use technology either before or during trips, found Booz & Company, which analyzed data throughout the report. Much of this activity is to discover value-32% use online coupons, 31% use mobile devices, and 23% check prices at multiple stores online before heading to the store. One in four shoppers (25%) use technology at least two of these ways, and one in 11 shoppers (9%) use technology all three ways.
• During pre-trip planning, 32% of shoppers use online coupons more than 25% of the time, 23% check prices, 20% research products, 19% build shopping lists on a mobile device, and 16% read product reviews.
• In-store, 8% of shoppers compare prices on at least 25% of trips, while 9% check for coupons and track spend. Other non-price activities include checking for recipes (13%) and checking nutritional information (7%).
Trend 3. More than half of consumers (54%) buy groceries online at least occasionally-mostly in specific nonfood categories.
• Just 12% of shoppers buy dry groceries and beverage online, and 4% buy fresh foods and produce online. By contrast, 29% buy beauty, personal and health care items online. These occur mostly on an occasional basis.
• Traditional stores may be able to address the key reasons why people buy groceries online-convenience of home shopping (57% of online shoppers), lower prices (53%), home delivery (47%) and wider selection (44%).
Trend 4. Small stores, especially dollar and hard-discount formats, are expanding rapidly.
• Between 2005 and 2011, both channels upped their counts by 23%-dollar stores to 22,782 and hard discount stores to 2,410.
Another notable trend is the significant economic stimulus local food co-ops provide. Figures issued by the National Cooperative Grocers Association (NCGA) on data from its 128 independent co-op members indicate that:
• For every $1,000 spent at a local food co-op, $1,604 in economic activity is generated in the local economy. That's $239 more than if that $1,000 was spent at a conventional grocer.
• Co-op employees earn an average of nearly $1 more per hour than conventional grocery workers when bonuses and profit sharing are included.
• 68% of co-op employees are eligible for health insurance vs. 56% of conventional grocery staff.
• Co-ops recycle 96% of cardboard (vs. 91% at conventional grocers), 81% of plastics (29% at conventional grocers), and 74% of food waste (36% at conventional grocers).
• Co-ops work with an average of 157 local farmers and producers vs. 65 at conventional grocers.
- Food Marketing Institute