Insights of consumers are a tool that every marketing team can benefit from. In the case of Progressive Grocer, they go directly to shoppers to explore not only what they’re buying in supermarkets, but also why they’re making certain decisions. In a great article by Jenny McTaggart the insights are easy to absorb. Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® wanted us to share them with you. Here are excerpts and a link:
METHODOLOGY
The survey for Progressive Grocer’s 75th
Consumer Expenditures Study was fielded Jan. 10-15, 2024, and includes
responses from 1,001 grocery store shoppers ages 18 and up. To qualify,
respondents had to identify as U.S. residents who shop at grocery stores at
least once a month and serve as the primary or shared decision-maker for
grocery shopping in their households. The average household income of
respondents was $68,230.
Traditionally Progressive Grocer’s annual Consumer
Expenditures Study (CES) has reported on the top-selling categories in
supermarkets around the country, essentially looking at what consumers are
buying in terms of dollars spent and units sold.
For the 75th CES, however, we’re doing
things a bit differently. This time, we went directly to grocery shoppers –
1,001 of them, to be exact – to find out not only what they’re
buying, but also where they’re buying groceries, why they
choose the stores they do, what they like and don’t like about
the shopping experience, and other factors that go into their decision-making.
In this way, our updated study takes the pulse on consumers’ attitudes on their
path to purchase. The 75th CES will be a benchmark study for
the magazine going forward, with the aim of establishing a measurable baseline
for understanding grocery shoppers’ preferences and behaviors in the years
ahead.
In addition, the study takes a deep dive into generational
insights, as well as differences between male and female shoppers and among
major geographical regions. For any grocery retailer operating today, it’s
crucial to recognize these differences and to make sure that you’re offering
different things for different shoppers. You can’t be one store to all people,
so it’s important to reach shoppers differently at the various stages of their
lives, ideally while presenting one unified brand message.
Major Themes of the 75th CES
Before we get into the details of the study, here are a few
major recurring themes and key insights:
·
Inflation continues to have a big
impact on shoppers’ behavior and has led them to buy less in the past year.
Price is now their No. 1 factor in choosing where to shop, though product
quality, finding items in stock and other attributes are still important.
·
The traditional grocery store is still
the primary place where people regularly purchase groceries, but alternative
formats – including online shopping – continue to gain steam. A little more
than half admit that they shop at three stores regularly.
·
Prepared food is a growth opportunity
for retailers, and younger consumers in particular are interested in convenient
meals and trying new things (but price still comes into play).
·
Most shoppers now self-identify as
“health-conscious,” and some are willing to switch stores over sustainability
issues.
·
The categories most frequently
purchased at a grocery store within the past month include dairy, fresh
produce, bread/bakery items, salty snacks and fresh meat/seafood. When it comes
to private label, key categories are dairy, paper products, canned vegetables
and fruits, bread/bakery items, and household products.
These are just a few of the study highlights – keep reading
to learn more.
Store Preferences: Traditional Chains
Still Rule
With all of the talk regarding online retailing and
alternative formats, it’s important to note that the traditional grocery chain
still rules, at least among respondents to this survey, which was fielded Jan.
10-15. A huge number – 89% – visit a traditional grocery chain at least once a
week (and the figure jumps to 92% among consumers living in the western United
States). Mass merchandisers and supercenters are close behind, with 81%
visiting at least once a week.
Still, nontraditional formats are definitely gaining ground
nationwide. About half of those surveyed said that they purchase grocery items
at dollar stores, drug stores or discount grocery chains on a weekly basis,
while 48% are shopping at club stores. Additionally, just under half of
shoppers (47%) go online at least once a week for their grocery shop.
Meanwhile, independent grocery stores are bringing in fewer shoppers than other
formats (43%), although shoppers living in the eastern United States shop these
stores a bit more (47% visit weekly).
While it’s been said that shopper loyalty is fleeting these
days, more than three in four shoppers (78%) say that they shop regularly at
the same grocery store. When asked why they choose this store, 64% cited
“convenient location” as the main factor. Still, 54% admitted that they shop at
three stores regularly, so there’s no doubt that grocery dollars continue to be
siphoned off into different stores even for shoppers who primarily use a
traditional format. The banner shopped most often is Walmart (one-fourth
of shoppers across the country go there most often), followed by Kroger, at 10%. Of course,
it’s not surprising that national chains come out on top in a survey like this,
considering that most grocery chains are regionally based.
Lower Prices Are Top of Mind as
Inflation Lingers
With inflation on most Americans’ minds, it isn’t
surprising that price comes in as the No. 1 factor for choosing where to shop,
with four in five shoppers (83%) and an impressive 90% of Baby Boomers
selecting this attribute. They still care about quality, too, though: Following
price, other key factors include product quality (71%), freshness of products
(69%), products in stock (69%), convenient location (64%), variety of products
(64%), and store cleanliness (59%).
As for how shoppers today define value, while there are
differing opinions, a solid one-third said that value is “a good-quality
product for a good/fair price,” while 22% thought solely of “best/lowest
price.” Meanwhile, 38% preferred a good price over product quality (for Gen Z
shoppers, that number jumps to 55%).
When shoppers were asked to name one area of improvement in
their favorite store, they most often cited out-of-stocks, along with their
desire for lower prices and faster checkout (several complained about long
lines or not being able to find a cashier, or at least a properly trained one).
One respondent perfectly captured the feeling of a frustrated shopper: “It’s so
rare for me to find fresh basil or the correct flavors of sparkling water that
I need. I hate that I can only find the basil every once in a while.” Another
shopper, who’s clearly fed up with sticker shock, noted: “You spend $100 and
you have half a bag of groceries. That’s my biggest problem – I can’t afford to
eat.”
Inflation will likely continue to be a very real concern
for consumers, even if the economy continues to pick up this year. Almost 60%
of those surveyed said that inflation seems worse than it was one year ago, and
43% thought it will be worse one year from now, with males taking a slightly
more optimistic outlook.
Economic concerns are also affecting what people buy:
One-third confirmed that they bought fewer groceries in 2023 compared with
2022, with financial reasons being the primary cause. Not surprisingly, nearly
40% said that they’re spending more on groceries these days, but looking ahead,
they anticipated at least a little relief a year from now.
Today’s average spend for a grocery trip, based on
shoppers’ best recollections of how much they spent during their most recent
shop, stands at $108. Just over a quarter of respondents (26%) estimated that
they spent between $100 and $149.99 during their most recent shopping trip,
while 27% spent between $50 and $99.99.
Nearly eight in 10 shoppers admitted that they’ve changed
their behavior in some way to cope with inflation. Around 40% are either buying
fewer impulse items or buying items that are on sale, and 33% are buying more
store brands. Shoppers are also using more coupons (32%), buying more in
bulk/larger pack sizes (23%), shopping more often at discount grocery stores
(22%), and simply buying fewer higher-ticket items, including prepared foods,
fresh meat and seafood, and fresh produce.More than half (52%) said that they
purchase private label products always or often, and 77% said they do so to
save money. For now, they’re balanced when it comes to their preference/loyalty
for store brands versus name brands. However, 33% are interested in trying new
brands, whether they’re private labels or name brands (especially Gen Z), so
retailers that keep up with the latest product trends are more likely to grow
their own-brand strategies.
Shopping Behaviors: Most Plan Ahead
but Appreciate Meal Inspo
Today’s shoppers want it all: They prefer to plan ahead and
stock up on their grocery runs, but they also want to get in and out of the
store quickly. One-fifth admitted to being more of an “impulsive buyer,” with
Gen Zers and Millennials significantly more likely to fall into this camp.
Meanwhile, just over a third (35%) agreed that they like to take more time to
browse the store. Looking ahead to 2025, shoppers didn’t anticipate significant
changes in these behaviors.
An impressive 63% said that they make a shopping list, but
at the same time they’re open to making additional purchases once they enter
the store. (Only 20% don’t make a list.)
Meanwhile, when it comes to flyers, 39% use digital flyers
and 36% peruse mailed flyers before they step foot in the store. About a fifth
(23%) said that they pick up a flyer in the store, and 13% look at digital
flyers on their phones while they’re shopping. One-fifth admitted to not using
flyers at all.
Almost half of shoppers displayed a strong preference for
more flexible meal planning (particularly females), although 42% leaned toward
cooking from scratch as opposed to buying convenient meals. One caveat: Gen
Zers and Millennials are more likely to opt for convenient meals, although all
generational groups expected to be stricter with meal planning and cook more a
year from now. This could be partly due to the timing of the survey, since New
Year’s resolutions are still fresh on everyone’s minds in early January, but
it’s also likely that shoppers are thinking of their budgets and health.
In-Store Versus Online
Nearly all respondents (95%) said that they shopped
in-store for groceries in the past month, but online shopping is proving to be
a regular routine these days, with one-fifth purchasing online for in-person
delivery or curbside pickup. Across all trips, on average, 79% are completed in
the store. When asked if they have a preference for shopping in-store or
online, 72% still gravitated toward the store, but a small percentage (14%)
were leaning toward online purchases a year from now.
Over the next year, most expected their purchase methods to
remain consistent, although one-fifth thought that they’ll do more in-store
shopping and 11% expected their online usage to ramp up. Baby Boomers are the
least likely to make the switch to online shopping, while Gen Zers and
Millennials said that they’ll shop “more” in both the physical store and
online, using both contactless delivery and in-store pickup.
It turns out that most online shoppers were satisfied
overall with the experience, yet there were some areas for improvement cited by
a small percentage. These include out-of-stocks, expensive fees and
dissatisfaction with product substitutions. One disgruntled shopper admitted,
“Sometimes I get an entire order that isn’t even mine!”
.jpg)
Prepared Foods Present Growth
Opportunity
Prepared food continued to account for a healthy part of
the grocery business. The category was purchased by two-thirds of shoppers in
the past month, with an average of 2.5 purchase occasions. Gen Zers and
Millennials bought these foods significantly more than Gen Xers and Boomers,
and shoppers in the West were also overindexing. Among those who didn’t
purchase prepared foods, 44% find them too expensive, 39% prefer to purchase
somewhere else or cook at home, and 37% just don’t have prepared foods in mind when
they visit the supermarket.
For those who bought prepared foods, hot entrées like fried
or rotisserie chicken and lasagna were the most popular (purchased by more than
half of shoppers), while baked goods made in the store, prepared cold sides and
prepared hot sides were favored by about one-third of shoppers. Shoppers’
overall satisfaction with their prepared food purchases was generally high:
Three-fourths indicated that they were completely or very satisfied with their
most recent purchase.
Prepared food purchases today are being driven primarily by
price – in common with every other part of the store – but 59% saw food quality
as the most important factor, followed by 56% citing taste and 51% going for
freshness. A noticeable one-fifth focused on portion size, and males were
significantly more likely than females to mention portion size and menu.
Even though lunch has become a more popular daypart for
prepared food since COVID-19, dinner was clearly prime time for these
purchases: Just over half of shoppers (54%) are buying meals or snacks during
dinnertime hours. Boomers in particular are more apt to head to the store in
the evening for prepared foods.
While 18% said that they consume these foods away from home
(either in the store, at work, in the car or elsewhere), an overwhelming 82%
take them home to enjoy.
When they aren’t purchasing prepared food in their local
supermarket, 42% are preparing their own food at home, 31% visit fast-food
restaurants, and 12% go to fast-casual venues. Supermarkets clearly have room
for improvement in their prepared food programs: Nearly 60% perceived casual
dining as better than grocery, 47% felt fast-casual food is better, and even
30% thought fast food is better than supermarket fare. Convenience store food
is the only channel that’s perceived as being inferior to grocery.
There’s promising news for grocers that are willing to
invest more in prepared foods: Nearly one-third of shoppers indicated they
would try an in-store restaurant if it were available. It appears that
made-to-order prepared food is the most common service offered at grocery
today, and meal kits are being offered by just over half of stores, but 32% of
respondents hadn’t tried them yet.
Health and Sustainability Concerns
Affect Decisions
In case anyone is still wondering, health and
sustainability have definitely hit the mainstream among American shoppers. In
this study, a substantial seven in 10 shoppers self-identified as “health
conscious.” For Millennials and Boomers, that number jumped to 75%, and among
shoppers living in the Northeast, the figure was 77%. The good news is that
just over half of health-conscious shoppers said that they’re either extremely
or very satisfied with their store’s selection.
Taking a deeper dive into shoppers’ top health concerns,
fresh, sugar and protein came up as the top attributes on their minds. At least
one-fifth were also concerned about calories, sodium, all-natural foods and
“ingredients I can understand and pronounce,” and Boomers in particular were
paying more attention to sodium. Younger shoppers in the Gen Z and Millennial
groups tended to be more concerned with caffeine and protein.
As for sustainability issues, most shoppers indicated
interest in nearly all sustainable practices, with EV-charging stations being
the exception (55% said that they’re “not concerned,” although Gen Zers,
Millennials and males were more likely to show interest than other groups).
More than half would like to see their stores donate food instead of throwing
it out (54% saw this as a “really important” practice, with Gen Zers favoring
it the most). In addition, recycling, ethical sourcing, and zero waste goals
were viewed as “really important” by just over one-third of shoppers.
While sustainable practices are desirable to today’s
eco-minded consumers, price is still an important factor even when they feel
they’re doing the right thing. Six in 10 indicated that they were at least
somewhat likely to switch to a more sustainable store; however, of potential
switchers, four in 10 weren’t willing to pay more. It’s important to note that
just over 20% of both Gen Zers and Millennials were willing to pay “a lot or
somewhat more” than Baby Boomers.
Local products continue to attract both young and old
shoppers alike: Three-fourths said that they purchase local products at grocery
stores at least some of the time, and most are purchasing them to support
businesses in their communities or because they perceive the quality to be
better. Almost 40% of Millennials said that they purchase these products always
or often.
Top Categories Purchased
What consumers tell us they’re purchasing matches up pretty
closely with the latest sales data from NielsenIQ and other sources. In PG’s
75th CES, the categories most frequently purchased at a grocery store within
the past month include dairy (milk, eggs and cheese), at 86%; fresh produce
(85%); bread/bakery items (82%); salty snacks (78%); and fresh meat/seafood
(75%). Looking at generational differences, Gen Zers and Millennials are more
likely to have purchased prepared foods, energy drinks, functional beverages
and baby food. Meanwhile, females overindexed on purchases of fresh produce,
shelf-stable grains, cooking fats, baking supplies, confectionary and pet food,
suggesting that many of them are likely still the bakers (and primary shoppers)
in their households.
Among nonedible categories, paper products, laundry
detergent and personal care products come out on top, with 66%, 62% and 58% of
shoppers purchasing these categories, respectively, in the past month. OTC
medication has decreased significantly in monthly purchase incidence, which
could signal a shift to more online purchases or a preference for stand-alone
pharmacies/drug stores. Gen Zers and Millennials are more likely to have
purchased more household sanitizing products, pet supplies, toys/games, office supplies,
books and magazines, and diapers/baby supplies. Retailers should take note of
this, since some general merchandise categories have been overlooked in
traditional supermarkets in more recent years.
Price-conscious shoppers who are purchasing more store
brands to save money are most often buying private label versions of dairy
(57%), paper products (52%), canned vegetables and fruits (51%), bread/bakery
items (51%), and household products (48%).
Invite Foodservice
Solutions® to complete a Grocerant ScoreCard, or for product positioning or
placement assistance, or call our Grocerant Guru®. Since 1991 Foodservice Solutions® of Tacoma, WA has been the
global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869
No comments:
Post a Comment