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Mass Merchandisers - US - March 2015

“Mass merchandisers are well-positioned to continue being a primary part of customers’ shopping journeys because of consumers’ continued emphasis on wanting value and convenient shopping solutions. However, it appears that all the key retailers are focused on the same initiatives including small store format expansion, adding services like in-store pickup, enhancing the customer experience through loyalty programs, and better melding the intersection of digital and physical stores. These initiatives are certainly of paramount importance, but the challenge is to execute differently and to infuse more human touches into the customer experience.”
– Diana Smith, Senior Research & Apparel Analyst

This report answers the following questions:

  • What role do Hispanics and Blacks play for mass merchandisers?
  • How can mass merchandisers enrich their customers’ shopping experiences?
  • How is online and mobile shopping changing the landscape?

Total US retail sales at mass merchandisers reached over $600 billion in 2014, an increase from 2013. Sales are expected to grow steadily through 2019. This growth is being influenced by the growing US population, namely Hispanics and Blacks, who are important to the market. Consumers’ continued emphasis on convenience and obtaining low prices in spite of signs of economic recovery will keep them coming to mass merchandisers.

This report focuses on mass merchandisers, offers sales trends, profiles of major players in the US market, as well as a detailed exploration of consumers’ attitudes, usage, and shopping behaviors in this category.

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Direct marketing creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Overview
                        • The market
                          • Figure 1: Total US sales and fan chart forecast for mass merchandisers, at current prices, 2009-19
                        • Market drivers
                          • US population growth will benefit mass merchandisers
                            • Figure 2: Population by age, 2010-20
                          • Growth among Blacks and Hispanics also a positive factor
                            • Figure 3: Population aged 18 or older, by race and Hispanic origin, 2010-20
                          • Disposable personal income trending up
                            • Figure 4: Real Disposable Personal Income: Percent Change from Preceding Periods, 2007-14
                          • Consumers increasingly want better prices and more convenience
                            • Figure 5: Budget minded actions taken, September 2014
                          • Consumers shifting to online and mobile shopping
                            • The consumer
                              • Nearly everyone shops at mass merchandisers
                                • Figure 6: Mass merchandisers shopped in last six months, December 2014
                              • Walmart is preferred among mass merchandiser shoppers
                                • Figure 7: Primary mass merchandiser shopped (online or in-store) in last six months, December 2014
                              • At least half of all races/ethnicities are heavy shoppers
                                • Figure 8: Frequency of mass merchandiser shopping in-store, by race/Hispanic origin, December 2014
                              • Food and beverages top the list of items purchased
                                • Figure 9: Any item purchased in last six months, December 2014
                              • Women are more price-conscious than men
                                • Figure 10: Attitudes toward mass merchandiser shopping, by gender, December 2014
                              • Target and Meijer seen as fun and high quality; Walmart and Kmart can improve their quality perceptions
                                • Figure 11: Correspondence Analysis, December 2014
                              • What we think
                              • Issues and Insights

                                  • What role do Hispanics and Blacks play for mass merchandisers?
                                    • The issues
                                      • The implications
                                        • How can mass merchandisers enrich their customers’ shopping experiences?
                                          • The issues
                                            • The implications
                                              • How is online and mobile shopping changing the landscape?
                                                • The issues
                                                  • The implications
                                                  • Trend Applications

                                                      • Trend: The Nouveau Poor
                                                        • Trend: Return to the Experts
                                                          • Trend: Let’s Make a Deal
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • Mass merchandiser sales continue to climb
                                                                • Figure 12: Total US revenues and forecast for mass merchandisers, at current prices, 2009-19
                                                                • Figure 13: Total US revenues and forecast for mass merchandisers, at inflation-adjusted prices, 2009-19
                                                              • Supercenters and warehouse clubs command market share
                                                                • Figure 14: Total US revenues and forecast for mass merchandisers, by type, at current prices, 2012 and 2014
                                                              • Walmart enjoys steady growth while Kmart struggles; Target sales dip one point in most recent year
                                                                • Figure 15: US revenues of leading national mass merchandisers, at current prices, 2009-13
                                                              • Grocery makes up the majority of Walmart’s sales
                                                                • Figure 16: Walmart's US revenues, by merchandise category, at current prices, 2009-13
                                                              • All Target categories rather evenly contribute to its bottom line
                                                                • Figure 17: Target's US revenues, by merchandise category, at current prices, 2009-13
                                                              • Kmart experiencing declines in all departments, namely food and drug
                                                                • Figure 18: Kmart's US revenues, by merchandise category, at current prices, 2009-13
                                                              • Fan chart forecast
                                                                  • Figure 19: Total US sales and fan chart forecast for mass merchandisers, at current prices, 2009-19
                                                              • Market Drivers

                                                                • Key points
                                                                  • US population growth will benefit mass merchandisers
                                                                    • Figure 20: Population by age, 2010-20
                                                                  • Growth of multi-cultural segments will drive mass merchandisers’ businesses
                                                                    • Figure 21: Population aged 18 or older, by race and Hispanic origin, 2010-20
                                                                  • Consumer confidence climbs while unemployment rates continue to dip
                                                                    • Figure 22: Consumer confidence and unemployment, 2000-January 2015
                                                                  • Gross domestic product drops in most recent quarter; disposable personal income rises
                                                                    • Figure 23: Real Gross Domestic Product and related measures: Percent change from preceding period, 2007-2014
                                                                    • Figure 24: Real Disposable Personal Income: Percent Change from Preceding Periods, 2007-2014
                                                                  • Consumers remain very value-conscious
                                                                    • Figure 25: US Median household income, in inflation-adjusted dollars, 2003-13
                                                                  • Mass merchandisers offer the convenience consumers desire
                                                                    • Online and mobile shopping will become a larger part of mass merchandiser shoppers’ repertoire
                                                                      • Recent security breaches at retailers have had relatively short-term effects
                                                                      • Retailer Overview

                                                                          • Walmart quick facts
                                                                            • Company overview
                                                                              • Key initiatives
                                                                                • Small format growth
                                                                                  • Figure 26: Walmart, Direct Mail, January 2015
                                                                                • Enhanced grocery services
                                                                                  • Prioritizing e-commerce
                                                                                    • Figure 27: Walmart, Landing Page, February 2015
                                                                                  • Investment in employees
                                                                                    • Recent news and innovations
                                                                                      • Target quick facts
                                                                                        • Company overview
                                                                                          • Key initiatives
                                                                                              • Figure 28: Target, Mobile ad for Cartwheel app, October 2014
                                                                                            • Other services
                                                                                              • Figure 29: Target, Direct Mail, December 2014
                                                                                            • Recent news and innovations
                                                                                                • Figure 30: Target, Mobile ad featuring holiday campaign, November 2014
                                                                                              • Kmart quick facts
                                                                                                • Company overview
                                                                                                  • Key initiatives
                                                                                                    • Shop Your Way loyalty program
                                                                                                      • Philanthropic efforts
                                                                                                        • Recent campaigns
                                                                                                          • Service offerings
                                                                                                            • Figure 31: Kmart, Landing Page, December 2014
                                                                                                          • Recent news and innovations
                                                                                                            • Meijer quick facts
                                                                                                              • Company overview
                                                                                                                • Key initiatives
                                                                                                                  • Community involvement
                                                                                                                    • Rewards program
                                                                                                                      • Figure 32: Meijer, Email, November 2014
                                                                                                                    • Recent news and innovations
                                                                                                                      • Fred Meyer company overview
                                                                                                                        • Key initiatives
                                                                                                                          • Community involvement
                                                                                                                            • Other offerings
                                                                                                                              • Figure 33: Fred Meyer, Direct Mail, September 2014
                                                                                                                              • Figure 34: Fred Meyer, Email, September 2014
                                                                                                                          • Competitive Context

                                                                                                                            • Other retail store types
                                                                                                                              • Amazon.com
                                                                                                                              • Mass Merchandisers Shopped in Last Six Months: Overall and Primary

                                                                                                                                • Key points
                                                                                                                                  • Nearly everyone shops at mass merchandisers
                                                                                                                                    • Figure 35: Mass merchandisers shopped in last six months, December 2014
                                                                                                                                  • Walmart is preferred among mass merchandiser shoppers
                                                                                                                                    • Figure 36: Primary mass merchandiser shopped (online or in-store) in last six months, December 2014
                                                                                                                                  • Shopping fairly even by gender
                                                                                                                                    • Figure 37: Mass merchandisers shopped in-store in last six months, by gender, December 2014
                                                                                                                                  • Mass merchandiser shoppers tend to skew younger; Walmart maintains most evenly balanced customer base
                                                                                                                                    • Figure 38: Mass merchandisers shopped in-store in last six months, by age, December 2014
                                                                                                                                  • One third of females 18-34 prefer Target
                                                                                                                                    • Figure 39: Primary mass merchandiser shopped (online or in-store) in last six months, December 2014
                                                                                                                                  • Target draws an upscale audience
                                                                                                                                    • Figure 40: Mass merchandisers shopped in-store in last six months, by household income, December 2014
                                                                                                                                    • Figure 41: Primary mass merchandiser shopped (online or in-store) in last six months, by household income, December 2014
                                                                                                                                  • Consumers living in rural areas gravitate towards Walmart
                                                                                                                                    • Figure 42: Mass merchandisers shopped in-store in last six months, by area, December 2014
                                                                                                                                  • Past four-week shopping incidences are down across the board
                                                                                                                                    • Figure 43: Purchase incidence at mass merchandisers in last 4 weeks, July 2009-September 2014
                                                                                                                                • Frequency of Mass Merchandising Shopping

                                                                                                                                  • Key points
                                                                                                                                    • Majority of mass merchandiser shoppers shop at least once a week
                                                                                                                                      • Figure 44: Frequency of mass merchandising shopping, December 2014
                                                                                                                                    • Walmart visited most frequently
                                                                                                                                      • Figure 45: Frequency of mass merchandiser shopping in last four weeks – August 2013-September 2014
                                                                                                                                    • Men are more frequent shoppers
                                                                                                                                      • Figure 46: Frequency of mass merchandiser shopping in-store, by gender, December 2014
                                                                                                                                    • Two thirds of adults 25-34 are heavy shoppers
                                                                                                                                      • Figure 47: Frequency of mass merchandiser shopping in-store, by age, December 2014
                                                                                                                                    • Shopping frequency increases with household size
                                                                                                                                      • Figure 48: Frequency of mass merchandiser shopping in-store, by presence of children under 18 in the household and by household size, December 2014
                                                                                                                                  • Items Purchased at Mass Merchandisers

                                                                                                                                    • Key points
                                                                                                                                      • Online purchase levels high for many items; some higher than in-store
                                                                                                                                        • Figure 49: Any item purchased in last six months, December 2014
                                                                                                                                      • Items purchased can vary by retailer
                                                                                                                                        • Figure 50: Items purchased at mass merchandisers in last three months, August 2013-September 2014
                                                                                                                                      • Men are more likely than women to purchase higher-ticket items
                                                                                                                                        • Figure 51: Any item purchased in last six months, by gender, December 2014
                                                                                                                                      • Groceries appeal to consumers of all ages
                                                                                                                                        • Figure 52: Any item purchased in last six months, by age, December 2014
                                                                                                                                        • Figure 53: Types of coupons used, July 2009-September 2014
                                                                                                                                    • Attitudes toward Mass Merchandiser Shopping

                                                                                                                                      • Key points
                                                                                                                                        • Consumers like the convenience and value mass merchandisers offer
                                                                                                                                          • Figure 54: Attitudes toward mass merchandiser shopping, December 2014
                                                                                                                                        • Women are more price-conscious than men
                                                                                                                                          • Figure 55: Attitudes toward mass merchandiser shopping, by gender, December 2014
                                                                                                                                        • Older generations are the least likely to be loyal to any one mass merchandiser
                                                                                                                                          • Figure 56: Attitudes toward mass merchandiser shopping, by generations, December 2014
                                                                                                                                      • Influencers to Encourage More Mass Merchandiser Shopping

                                                                                                                                        • Key points
                                                                                                                                          • More promotions and faster check-out processes could encourage more shopping at mass merchandisers
                                                                                                                                            • Figure 57: Factors that would influence more frequent shopping at mass merchandisers, by gender, December 2014
                                                                                                                                          • A positive experience overall can influence repeat visitation
                                                                                                                                            • Figure 58: Factors that would influence more frequent shopping at mass merchandisers, by age, December 2014
                                                                                                                                          • Most used incentive offers: rebates on product purchases and free products and coupons
                                                                                                                                              • Figure 59: Coupon use, July 2009-September 2014
                                                                                                                                              • Figure 60: Incentive offer usage, July 2009-September 2014
                                                                                                                                              • Figure 61: Types of incentive offers used, July 2009-September 2014
                                                                                                                                              • Figure 62: Types of incentive offers used, by age, August 2013-September 2014
                                                                                                                                              • Figure 63: Types of incentive offers used, by household income, August 2013-September 2014
                                                                                                                                          • Race and Hispanic Origin

                                                                                                                                            • Key points
                                                                                                                                              • Hispanics and Blacks are key to the market
                                                                                                                                                • Figure 64: Mass merchandisers shopped in-store in last six months, by race/Hispanic origin, December 2014
                                                                                                                                                • Figure 65: Primary mass merchandiser shopped (online or in-store) in last six months, by race/Hispanic origin, December 2014
                                                                                                                                              • At least half of all races/ethnicities are heavy shoppers
                                                                                                                                                • Figure 66: Frequency of mass merchandiser shopping in-store, by race/Hispanic origin, December 2014
                                                                                                                                                • Figure 67: Frequency of mass merchandiser shopping in last four weeks – by race/Hispanic origin, August 2013-September 2014
                                                                                                                                              • Electronics, toys and games, and music popular among minorities
                                                                                                                                                • Figure 68: Any item purchased in last six months, by race/Hispanic origin, December 2014
                                                                                                                                              • Blacks may not realize full savings potential mass merchandisers offer
                                                                                                                                                  • Figure 69: Attitudes toward mass merchandiser shopping, by race/Hispanic origin, December 2014
                                                                                                                                                • Consumers want to order online and be able to pick up in-store
                                                                                                                                                  • Figure 70: Factors that would influence more frequent shopping at mass merchandisers, by race/Hispanic origin, December 2014
                                                                                                                                                • Blacks very engaged with incentive offers
                                                                                                                                                  • Figure 71: Types of incentive offers used, by race/Hispanic origin, August 2013-September 2014
                                                                                                                                              • Correspondence Analysis

                                                                                                                                                • Methodology
                                                                                                                                                  • Target and Meijer most high quality and cool; Walmart and Kmart seen as cheap
                                                                                                                                                      • Figure 72: Correspondence Analysis, December 2014
                                                                                                                                                      • Figure 73: Characteristics associated with mass merchandisers, December 2014
                                                                                                                                                  • Appendix – Other Useful Consumer Tables

                                                                                                                                                    • Mass merchandisers shopped in-store
                                                                                                                                                      • Figure 74: Mass merchandisers shopped in-store in last six months, by presence of children in household, December 2014
                                                                                                                                                      • Figure 75: Mass merchandisers shopped in-store in last six months, by household size, December 2014
                                                                                                                                                    • Mass merchandisers shopped online
                                                                                                                                                      • Figure 76: Mass merchandisers shopped online in last six months, by gender, December 2014
                                                                                                                                                      • Figure 77: Mass merchandisers shopped online in last six months, by age, December 2014
                                                                                                                                                      • Figure 78: Mass merchandisers shopped online in last six months, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 79: Mass merchandisers shopped online in last six months, by household income, December 2014
                                                                                                                                                      • Figure 80: Mass merchandisers shopped online in last six months, by presence of children in household, December 2014
                                                                                                                                                      • Figure 81: Mass merchandisers shopped online in last six months, by household size, December 2014
                                                                                                                                                    • Primary mass merchandisers shopped (online or in-store)
                                                                                                                                                      • Figure 82: Primary mass merchandiser shopped (online or in-store) in last six months, by presence of children in household, December 2014
                                                                                                                                                      • Figure 83: Primary mass merchandiser shopped (online or in-store) in last six months, by household size, December 2014
                                                                                                                                                    • Frequency of mass merchandisers shopped – in-store
                                                                                                                                                      • Figure 84: Frequency of mass merchandiser shopping in-store, by household income, December 2014
                                                                                                                                                    • Frequency of mass merchandisers shopped - online
                                                                                                                                                      • Figure 85: Frequency of mass merchandiser shopping online, by gender, December 2014
                                                                                                                                                      • Figure 86: Frequency of mass merchandiser shopping online, by age, December 2014
                                                                                                                                                      • Figure 87: Frequency of mass merchandiser shopping online, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 88: Frequency of mass merchandiser shopping online, by household income, December 2014
                                                                                                                                                      • Figure 89: Frequency of mass merchandiser shopping online, by presence of children in household, December 2014
                                                                                                                                                      • Figure 90: Frequency of mass merchandiser shopping online, by household size, December 2014
                                                                                                                                                    • Attitudes toward mass merchandiser shopping
                                                                                                                                                      • Figure 91: Attitudes toward mass merchandiser shopping, by age, December 2014
                                                                                                                                                      • Figure 92: Attitudes toward mass merchandiser shopping, by household income, December 2014
                                                                                                                                                    • Items purchased at mass merchandisers
                                                                                                                                                      • Figure 93: Any item purchased in last six months, by household income, December 2014
                                                                                                                                                      • Figure 94: Any item purchased in last six months, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 95: Any item purchased in last six months, by household size, December 2014
                                                                                                                                                    • Grocery departments shopped at mass merchandisers
                                                                                                                                                      • Figure 96: Grocery departments shopped within mass merchandisers, August 2013-September 2014
                                                                                                                                                      • Figure 97: Number of times grocery department shopped, August 2013-September 2014
                                                                                                                                                    • Influencers to encourage more mass merchandiser shopping
                                                                                                                                                      • Figure 98: Factors that would influence more frequent shopping at mass merchandisers, by household income, December 2014
                                                                                                                                                    • Correspondence Analysis – characteristics associated with Walmart
                                                                                                                                                      • Figure 99: Characteristics associated with Walmart, by gender, December 2014
                                                                                                                                                      • Figure 100: Characteristics associated with Walmart, by age, December 2014
                                                                                                                                                      • Figure 101: Characteristics associated with Walmart, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 102: Characteristics associated with Walmart, by household income, December 2014
                                                                                                                                                      • Figure 103: Characteristics associated with Walmart, by presence of children in household, December 2014
                                                                                                                                                      • Figure 104: Characteristics associated with Walmart, by household size, December 2014
                                                                                                                                                      • Figure 105: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Walmart, Part 1, December 2014
                                                                                                                                                      • Figure 106: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Walmart, Part 2, December 2014
                                                                                                                                                    • Correspondence Analysis – characteristics associated with Target
                                                                                                                                                      • Figure 107: Characteristics associated with Target, by gender, December 2014
                                                                                                                                                      • Figure 108: Characteristics associated with Target, by age, December 2014
                                                                                                                                                      • Figure 109: Characteristics associated with Target, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 110: Characteristics associated with Target, by household income, December 2014
                                                                                                                                                      • Figure 111: Characteristics associated with Target, by presence of children in households, December 2014
                                                                                                                                                      • Figure 112: Characteristics associated with Target, by household size, December 2014
                                                                                                                                                      • Figure 113: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Target, part 1, December 2014
                                                                                                                                                      • Figure 114: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Target, part 2, December 2014
                                                                                                                                                    • Correspondence analysis - characteristics associated with Meijer
                                                                                                                                                      • Figure 115: Characteristics associated with Meijer, by gender, December 2014
                                                                                                                                                      • Figure 116: Characteristics associated with Meijer, by age, December 2014
                                                                                                                                                      • Figure 117: Characteristics associated with Meijer, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 118: Characteristics associated with Meijer, by household income, December 2014
                                                                                                                                                      • Figure 119: Characteristics associated with Meijer, by presence of children in household, December 2014
                                                                                                                                                      • Figure 120: Characteristics associated with Meijer, by household size, December 2014
                                                                                                                                                      • Figure 121: Characteristics associated with Meijer, by marital/relationship status, December 2014
                                                                                                                                                    • Correspondence analysis - characteristics associated with Kmart
                                                                                                                                                      • Figure 122: Characteristics associated with Kmart, by gender, December 2014
                                                                                                                                                      • Figure 123: Characteristics associated with Kmart, by age, December 2014
                                                                                                                                                      • Figure 124: Characteristics associated with Kmart, by race/Hispanic origin, December 2014
                                                                                                                                                      • Figure 125: Characteristics associated with Kmart, by household income, December 2014
                                                                                                                                                      • Figure 126: Characteristics associated with Kmart, by presence of children in household, December 2014
                                                                                                                                                      • Figure 127: Characteristics associated with Kmart, by household size, December 2014
                                                                                                                                                      • Figure 128: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Kmart, part 1, December 2014
                                                                                                                                                      • Figure 129: Primary mass merchandiser shopped (online or in-store) in last six months, by characteristics associated with mass merchandisers – Kmart, part 2, December 2014
                                                                                                                                                  • Appendix – Trade Associations

                                                                                                                                                    Companies Covered

                                                                                                                                                    • Kmart Corporation
                                                                                                                                                    • National Retail Federation (NRF)
                                                                                                                                                    • Target Corporation
                                                                                                                                                    • The Kroger Co.
                                                                                                                                                    • Walmart Stores (USA)

                                                                                                                                                    Mass Merchandisers - US - March 2015

                                                                                                                                                    US $3,995.00 (Excl.Tax)