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Grocery Retailing - Canada - November 2016

Canadian grocery shoppers are engaged with the centre of the grocery store, buying pantry staples as well as snacks and drinks. However, the area suffers from a bit of a bad reputation given the adage ‘to stay at the perimeter in order to shop healthier’.

This report examines the following issues:

  • Need! Don’t need! – Consumers hold dual attitudes towards the centre of the store
  • Younger shoppers need an attitude adjustment: 18-34s most likely to negatively view centre-of-store
  • A more conservative mindset means a greater willingness to trade down

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Need! Don’t need! – Consumers hold dual attitudes towards the centre of the store
            • Figure 1: Attitudes towards centre-of-store products, September 2016
          • Younger shoppers need an attitude adjustment: 18-34s most likely to negatively view centre-of-store
            • Figure 2: Attitudes towards centre-of-store products, by age, September 2016
          • A more conservative mindset means a greater willingness to trade down
            • Opportunities
              • Connecting with the time-pressed, ‘no time to look around’ shopper by using placement suggestions
                • Figure 3: Attitude towards browsing when grocery shopping, by gender, September 2016
              • Men and fathers could use a helping hand
                • Figure 4: Interest in innovations (tech related), fathers with children under-18 at home vs overall, September 2016
              • Quebecers are more open to shelf-stable products
                • Figure 5: Agreement with statement “centre-of-store is filled with mostly ‘junk’ food” (any agree), Quebec vs overall population, September 2016
              • What it means
              • The Market – What You Need to Know

                • Population shifts mean serving more diverse needs
                  • Engaging older shoppers increasingly important as the population ages
                    • Changes in household makeup leads to shoppers with varying grocery needs
                      • Economic conditions weigh on consumers’ minds
                      • Market Factors

                        • Population changes means catering to a more diverse consumer group
                          • Grocery retailers will need to consider a more diverse palette as immigration drives population growth
                            • Figure 6: Region of birth of immigrants, by period of immigration, Canada, 2011
                          • Points of consideration include flavours, behaviours and health
                            • An aging population opens opportunities for centre-of-store
                              • Figure 7: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                            • Changing roles in the household will impact shopping behaviour
                              • The family structure is changing
                                • Retailers need to consider those who are playing a more supporting role
                                  • Retailers are dealing with a more price-conscious consumer
                                    • Figure 8: Monthly movement in selected components of the Canadian Consumer Price Index, seasonally adjusted, Aug 2011-Aug 2016
                                • Key Trends – What You Need to Know

                                  • Consumers stockpile pantry staples and snacks
                                    • Grocery retailers expanding their reach by catering to a wider range of consumer needs
                                      • Challenges are seen with both older and younger consumers
                                        • Consumers look to retailers for greater assistance
                                          • Demographics and mindful eating support interest in centre-of-store products
                                          • What’s Working?

                                            • Consumers are keeping their pantries stocked with staples and snacks
                                              • Manufacturers of shelf-stables targeting men
                                                • Figure 9: Edge Cereal – Boxcar, August 2016
                                              • Snacking keeps consumers returning to the centre of the grocery store
                                                • Figure 10: Kellogg’s Special K Nourish Dark Chocolate Chunks & almond chewy bars (Canada, March 2016)
                                                • Figure 11: Hippie Foods Hippie Snacks Coconut Chips (July 2015)
                                              • Grocery retailers extending reach by inviting customers to dine in
                                                • Catering to the increasingly diverse population draws customers in
                                                • What’s Struggling?

                                                  • There are challenges with both older and younger consumers
                                                    • 18-34s perceive shelf-stable foods as processed
                                                      • Figure 12: Associations with shelf-stable foods, women 18-34 vs overall population, September 2016
                                                    • Eating habits of over-55s do not necessarily align with centre-of-store products
                                                      • Figure 13: Grocery department use (any rank), over-55s by overall, September 2016
                                                  • What’s Next?

                                                    • The power of suggestion through meal planning
                                                      • The tech connection resonates
                                                        • An increasingly diverse population brings about growth opportunities
                                                          • Figure 14: Pimentel foods Basmati rice (September 2015)
                                                        • Canadians are looking to eat with purpose
                                                          • Figure 15: Danone Raspberry Probiotic Yogurt (October 2016)
                                                      • The Consumer – What You Need to Know

                                                        • Canadian grocery shoppers prefer efficiency over browsing
                                                          • Sentiments about the centre-of-store are mixed
                                                            • Supermarkets are the preferred location though will need to do more to keep consumers engaged with the centre of the store
                                                              • Potential to increase engagement with centre-of-store by making it more interactive
                                                              • About the Canadian Grocery Shopper

                                                                • Both men and women hold primary responsibility for buying groceries
                                                                  • Figure 16: Grocery shopping responsibility, September 2016
                                                                • Shopping preference skews towards shopping efficiency over browsing
                                                                  • Figure 17: Attitude towards browsing when grocery shopping, September 2016
                                                                • The need for speed may be due to necessity for some
                                                                  • Consumers may be thinking of meals by occasions
                                                                    • Figure 18: Attitude towards supermarkets organizing foods by occasions, men vs overall population, September 2016
                                                                  • Guiding consumer choices can be mutually beneficial
                                                                    • Technology is a welcome assistance
                                                                    • Spotlight on Centre-of-Store: What Consumers Buy

                                                                      • Pantry staples are purchased most often
                                                                        • Figure 19: Grocery department use (any rank), September 2016
                                                                      • Pantry staples resonate more with women; convenience appeals to men
                                                                          • Figure 20: NEW! Olivieri Signature Formaggi Tortelloni, February 2016
                                                                        • Young grocery shoppers are snacking
                                                                            • Figure 21: Select grocery department use (any rank), 18-24s vs overall population, September 2016
                                                                          • Snacking appeals to Chinese Canadians
                                                                            • Quebecers are buying starch staples and packaged baked goods
                                                                            • Sentiments toward Centre-of-Store Products

                                                                              • Centre-of-store items: good to have, love to hate
                                                                                • Figure 22: Attitudes towards centre-of-store products, September 2016
                                                                              • Centre-of-store equates to shelf-stable – in their words
                                                                                • Shelf-stables seen less positively than frozen foods
                                                                                  • Figure 23: Associations with centre-of-store foods, September 2016
                                                                                • Separating the good from the bad: strategies to increase engagement
                                                                                  • Promoting the ‘need to haves’: special consideration for 18-34s
                                                                                    • Figure 24: Hodgson Mill Italian Quinoa and Brown Rice (April 2015)
                                                                                    • Figure 25: Pereg whole Grain Quinoa (May 2016)
                                                                                    • Figure 26: Attitudes towards centre-of-store products, by age, September 2016
                                                                                  • Be real about the ‘goodies’, call a spade a spade: special consideration for parents
                                                                                    • Centre-of-store wins on convenience: special consideration for over-55s
                                                                                      • Perception of health is less of a barrier for Quebecers
                                                                                      • Purchase Locations for Centre-of-Store Products

                                                                                        • Supermarkets lead, though need to be aware of expanding horizons
                                                                                          • Figure 27: Centre-of-store food purchase locations (any rank), September 2016
                                                                                        • Value and convenience of mass merchandisers are winning over parents
                                                                                            • Figure 28: Ranked mass merchandiser “supercentres” 1st for centre-of-store purchases, mothers with children under-18 at home vs overall population, September 2016
                                                                                          • A lack of differentiation in offerings may be hurting supermarkets
                                                                                            • Figure 29: Attitudes towards centre-of-store products, September 2016
                                                                                          • Owning the lane: supermarkets have a ‘fresh’ advantage
                                                                                            • Elevating the fresh perception of centre-of-store products
                                                                                              • Setting the stage with flyers
                                                                                                • Figure 30: Attitudes towards store flyers, Mothers with children under-18 at home vs Overall population, September 2016
                                                                                              • Harnessing the power of private label
                                                                                                • Figure 31: From the PC kitchen: Your grocery list for less, September 2016
                                                                                            • Enhancing the Centre-of-Store Shopping Experience

                                                                                              • Sampling gives shelf-stable and frozen foods life
                                                                                                • Figure 32: Interest in innovations (in-store), September 2016
                                                                                              • Elevating the grocery shopping experience
                                                                                                • Making sampling more interactive
                                                                                                  • Using tech to help navigation and increasing personalization
                                                                                                    • Figure 33: Interest in innovations (tech related), by age, September 2016
                                                                                                  • Tech integrations will resonate with men and dads
                                                                                                  • Attitude towards Centre-of-Store: Canadians vs Americans

                                                                                                    • Canadians are less keen on keeping shelf-stables at hand
                                                                                                      • Figure 34: Attitude towards stockpiling shelf-stable foods, Canadian grocery shoppers vs American grocery shoppers, Canada September 2016, US January 2016
                                                                                                    • Canadians less open to packaged produce
                                                                                                      • Figure 35: Grocery department use (any rank), Canadian grocery shoppers vs American grocery shoppers, Canada September 2016, US January 2016
                                                                                                    • Logistical considerations may play a role
                                                                                                      • Figure 36: Grocery shopping responsibility, Canadians vs Americans, Canada September 2016, US January 2016
                                                                                                    • Canadian drug stores are making headway in centre-of-store
                                                                                                      • Figure 37: Grocery purchase from drug store (any rank), Canadian grocery shoppers vs American grocery shoppers, Canada September 2016, US January 2016
                                                                                                  • Consumer Segmentation

                                                                                                    • Four target groups
                                                                                                      • Figure 38: Centre-of-store shopper segments, September 2016
                                                                                                    • The Convenience Seeker (22%)
                                                                                                      • The Mass Merchandiser Shopper (25%)
                                                                                                        • The Anti Centre-of-Store Shopper (25%)
                                                                                                          • The Disengaged Male Shopper (27%)
                                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                                            • Data sources
                                                                                                              • Consumer survey data
                                                                                                                • Consumer qualitative research
                                                                                                                  • Abbreviations and terms
                                                                                                                    • Abbreviations

                                                                                                                    Companies Covered

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                                                                                                                    Grocery Retailing - Canada - November 2016

                                                                                                                    US $3,995.00 (Excl.Tax)