A Remix in Grocery Retailing

The retail market for foods and beverages is undergoing some of its greatest changes since supermarkets came to the fore in the 1940s and ’50s, according to The Future of Food Retailing: Shopper Insights and Market Opportunities, a just released report from market research firm Packaged Facts.

 According to David Sprinkle, Research Director for Packaged Facts, “Economic, demographic, lifestyle and technological changes have created not only a fertile environment but the absolute necessity for new concepts to engage shoppers, capture share of stomach, and re-invent food and beverage retailing.”

While the greatest competition to supermarkets and grocery stores comes from supersized “one-stop shopping” venues like supercenters and warehouse clubs, the threat has spread out across myriad retail channels, including drugstores, dollar stores, limited assortment chains, and (the elephant in the room) online grocery shopping.  Although supermarkets remain the majority force in food shopping, they are no longer calling the shots—a role now shared with Whole Foods and Trader Joe’s on the natural/specialty side, Walmart, club stores, and dollar stores on the value front, and farmers markets and food trucks in trend-setting.

At the same time, 2012 and 2013 have been big years for mergers and acquisitions in the retail food industry, as strategic buyers and private investors seek a way to expand their businesses to additional markets. And while the economy has shown positive signs of recovery in the past year, many consumers remain buffeted if not traumatized by higher gas prices, rising food prices, mounting healthcare costs, and increased payroll taxes.  As a result, most are still feeling economically squeezed and spending-shy.

Although many grocery shoppers are operating within a short time horizon, for most people grocery shopping is an activity that involves preparation.  A substantial majority of grocery shoppers (85%) report that they do some kind of planning beforehand, according to Packaged Facts Food Shopper Insights survey data.   Only 37% of grocery shoppers say they often stop by the grocery store on the spur of the moment.

That’s in large part because saving money remains a key consideration.  Two out of three grocery shoppers agree with the statement “I buy a lot of groceries that are on sale or promotion.”  Moreover, almost half (47%) used coupons or coupon codes during their most recent grocery shopping trip, 42% checked store circulars, 31% used store savings clubs/loyalty cards, and 11% used coupon matching services (such as double coupons).

Even if the vast majority (83%) of shoppers says they are satisfied with the store(s) where they usually shop for groceries, only slightly more than half (56%) enjoy grocery-shopping, and 18% actively dislike grocery shopping.  This slippage suggests that retailers can do much more to make the task of grocery shopping easier, less burdensome, and maybe even pleasurable for a significant proportion of their customers.

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