Friday, February 17, 2017

Does Online Grocery Shopping Hurt Legacy Chain Grocery Stores


When an industry sector is capitulating customers, sales, and retail format customer relevance they seemingly want to blame another someone else. Technology may not be the answer albeit and easy out according to Foodservice Solutions® Tacoma, WA basted Grocerant Guru® who stated “it’s not our fault customers are migrating to other formats; well yes it is!”

You can’t blame technology for a loss of customers as consumers are dynamic not static and the simple fact is that today consumer’s want fresh food and want it fast. The retail foodservice landscape is evolving. “Fresh food fast can be found at many more locations than a legacy grocery stores labyrinth maze designed to trap a consumer into a longer stay; when all they want is fresh food fast.” according to our Grocerant Guru®.

In fact simply put driving to a legacy grocery store is difficult for Millennials as NPD reports “Over half of Millennials don't own a car.” So, Millennials seek out new non-traditional retail locations with grocerant niche fresh prepared Ready-2-Eat and Heat-N-Eat food.  Specifically local fast food restaurants and convenience stores where they also buy ‘impulse’ items with high margins driving incremental day-part sales resulting in bottom line profits.

While according to Nielsen the online food shoppers buys the ‘basics’ and hard to carry / awkward products online and those items have become commoditized.  While the online shopper may come to your site because of your brand initially, they only stay if the price is ‘right. The online shopping experience saves consumers time and it has fast become a commoditized space.  Commoditization is not branded differentiation according to our Grocerant Guru® Steven Johnson

The NPD Group reports, that “52 million U.S. consumers, or roughly one sixth the size of the population of the United States, already buy groceries online. Those who are lapsed or new to the process plan to do more of it during the next six months”  Note they don’t buy weekly, what they do buy are the ‘basics’ and hard to carry / awkward products commoditized products.  
NPD goes on to say “Younger generations in particular, especially millennials and members of Generation Z, who grew up with technology, favor grocery shopping online, finding it "second nature ... to use the Internet for all types of purchases." However the team at Foodservice Solutions® notes again that without cars fresh, fast, food, is not found online nor are the consumers buying the high margin ‘impulse’ items online as they shop. 
Today there are 27 restaurants in the United States for every grocery store.  We ask without a car how many restaurants will a millennial walk buy for a fresh fast meal before visiting a legacy grocer?  We ask if it is time that legacy grocery stores rethink their footprint and adjust location formats to customers evolving lifestyles. Why is there a rush for legacy grocery stores to sell commoditized product online when technology is not there strong suit and fresh food is? 
Legacy brick-and-mortar retailers need to do what they do best sell fresh food fast.  If not, fast food retailers with start selling CPG fresh food faster.  There are 27 restaurants for every grocery store Foodservice Solutions® team believes that it is time for legacy grocery stores to re-examine your business model?  Have you considered doing what you do best; selling fresh food fast with portability and differentiation?  Remember Commoditization is not branded differentiation.

Foodservice Solutions® team is here to help you drive top line sales and bottom line profits. Are you looking a customer ahead? Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.


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