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The Food and Drink Shopping Experience - US - February 2013

"Securing longstanding patronage will come from creating a sense of investment in the food and drink retailer brand. This can come from developing a two-way relationship with consumers, allowing shoppers to feel as if stores are catering to their specific shopping lists and providing affordable products that meet their individual demands."

–  Beth Bloom, Food and Drink Analyst

Some questions answered in this report include:

  • Where are consumers shopping for food and drink?
  • How can retailers attract food and drink shoppers?
  • How can retailers inspire loyalty in an ever-growing marketplace?
  • How can nontraditional retailers grow food and drink sales?

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Table of contents

  1. Scope and Themes

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

                        • The market
                          • Market factors
                            • Retailers should regulate themselves before government does
                              • Channel performance
                                • Figure 1: Distribution of expenditures on food for off-premise consumption, by channel, 2012 (est.)
                                • Figure 2: Distribution of expenditures on food for off-premise consumption, supermarkets versus other,
                              • Innovation
                                • Drug stores expand private label offerings
                                  • Figure 3: Non-supermarket private label product launches, by channel, 2008-12
                                • The consumer
                                  • Supermarkets are primary food/drink retailer, face competition from mass
                                    • Figure 4: Food and drink shopping location, November 2012
                                  • Dollar stores, mass, and club stores grow following
                                    • Figure 5: Change in food and drink shopping behavior, November 2012
                                  • Shoppers under age 45 most willing to shop at a range of outlets
                                    • Figure 6: Food and drink shopping location, by generation, November 2012
                                  • Low price rises to the top of important attributes
                                    • Figure 7: Top five important attributes, November 2012
                                  • What we think
                                  • Issues in the Market

                                      • Where are consumers shopping for food and drink?
                                        • How can retailers attract food and drink shoppers?
                                          • How can retailers inspire loyalty in an ever-growing marketplace?
                                            • How can nontraditional retailers grow food and drink sales?
                                            • Insights and Opportunities

                                              • Make it convenient
                                                • Go to them
                                                  • Make it fun
                                                    • Utilize your assets
                                                      • Be different
                                                        • Secret savings
                                                          • Figure 8: General attitudes about food and drink shopping, by age, November 2012
                                                          • Figure 9: General attitudes about food and drink shopping, by household income, November 2012
                                                        • Make it affordable
                                                          • Encourage more shopping
                                                            • Create new sale seasons
                                                              • Make it personal
                                                                • Connect with the community
                                                                  • Put consumers in charge
                                                                    • Find a niche
                                                                    • Trend Applications

                                                                        • Trend: Access All Areas
                                                                          • Trend: Collective Intelligence
                                                                            • Future trend: Access Anything Anywhere
                                                                            • Market Drivers

                                                                              • Key points
                                                                                • Consumer confidence up in 2013, but lower income HHs struggle
                                                                                  • Figure 10: University of Michigan’s index of consumer sentiment (ICS), 2007-12
                                                                                • Retailers can help consumers navigate rising food costs
                                                                                  • Figure 11: Changes in USDA Food Price Indexes, 2010 through 2013
                                                                                  • Figure 12: Grocery shopping expenditures (including non-food and drink items), April 2007-June 2012
                                                                                • Population trends may further the shift away from supermarkets
                                                                                  • Figure 13: Population by race and Hispanic origin, 2008, 2013, and 2018
                                                                                • Retailers should regulate themselves before government does
                                                                                • Channel Performance

                                                                                  • Key points
                                                                                    • Supermarkets struggle with rise of nontraditional outlets
                                                                                      • Sales by channel
                                                                                        • Figure 14: Distribution of expenditures on food for off-premise consumption, by channel, 2010 and 2012
                                                                                    • Channel Performance—Supermarkets

                                                                                      • Key points
                                                                                        • Supermarkets challenged, but may be getting a handle on what works
                                                                                          • Figure 15: Kroger TV ad, “Multiple Sale,” 2013
                                                                                        • Extending range through smaller, concept stores is one means of targeting consumers
                                                                                          • Whole Foods finds success in focus and flexibility
                                                                                            • Figure 16: Whole Foods TV ad, “Declare Your Independence,” 2012
                                                                                          • Sales of food and drink at supermarkets
                                                                                            • Figure 17: U.S. supermarket sales and distribution of expenditures on food for off-premise consumption, 2002-12
                                                                                        • Channel Performance—Mass/Supercenters and Warehouse Clubs

                                                                                          • Key points
                                                                                            • Mass merchandisers, supercenters, and warehouse clubs lead growth
                                                                                              • Walmart highlights convenience and quality
                                                                                                • Figure 18: Walmart TV ad, “Steak-Over,” 2012
                                                                                              • Remind consumer about the availability of food and drink offerings
                                                                                                • Promote a focus on savings
                                                                                                  • Figure 19: BJ’s Wholesale Club TV ad, “The Cook,” 2012
                                                                                                • Sales of food and drink at mass/supercenters and warehouse clubs
                                                                                                  • Figure 20: U.S. mass/supercenters and warehouse clubs sales and distribution of expenditures on food for off-premise consumption, 2002-12
                                                                                              • Channel Performance—Convenience Stores/Other Grocery

                                                                                                • Key points
                                                                                                  • Convenience stores/other grocery steadily lose share
                                                                                                    • 7-Eleven stands apart from the rest
                                                                                                      • Figure 21: Brands of convenience stores shopped in the last four weeks, April 2011-June 2012
                                                                                                      • Figure 22: 7-Eleven TV ad, “Rites of Flavor,” 2012
                                                                                                    • Sales of food and drink at convenience stores/other grocery
                                                                                                      • Figure 23: U.S. convenience stores/other grocery sales and distribution of expenditures on food for off-premise consumption, 2002-12
                                                                                                  • Channel Performance—Specialty Food Stores

                                                                                                    • Key points
                                                                                                      • Specialty gains slight share from 2002-12
                                                                                                        • Sales of food and drink at specialty food stores
                                                                                                          • Figure 24: U.S. specialty food store sales and distribution of expenditures on food for off-premise consumption, 2002-12
                                                                                                      • Channel Performance—Other Stores

                                                                                                        • Key points
                                                                                                          • Other stores share unchanged, expanding offerings offer growth
                                                                                                            • Drug channel finds success in food
                                                                                                              • Walgreens focus on food
                                                                                                                • Dollar stores haven’t yet hit stride
                                                                                                                  • Sales of food and drink at other stores
                                                                                                                    • Figure 25: U.S. other store sales and distribution of expenditures on food for off-premise consumption, 2002-12
                                                                                                                • Innovations and Innovators

                                                                                                                  • New product launch trends
                                                                                                                    • Private label launches grow 11% from 2008-12
                                                                                                                      • Figure 26: Private label food and drink launches, by launch type, 2008-12
                                                                                                                    • Economy and environmentally friendly claims show strongest growth
                                                                                                                      • Figure 27: Private label launches, by top 10 claims, 2008-12
                                                                                                                    • Supermarkets lead private label launches
                                                                                                                      • Figure 28: Private label launches, by top 10 companies, 2008-12
                                                                                                                    • Private label follows general trends, could take greater role in leading
                                                                                                                      • Health
                                                                                                                        • Diet
                                                                                                                          • Organic
                                                                                                                            • Snack
                                                                                                                              • For entertaining
                                                                                                                                • Ethnic
                                                                                                                                  • Trendy
                                                                                                                                    • Bulk
                                                                                                                                      • Single shopper
                                                                                                                                        • Kids
                                                                                                                                          • Grocery tech
                                                                                                                                            • Figure 29: Attitudes about food and drink shopping technology, by age, November 2012
                                                                                                                                            • Figure 30: Attitudes about food and drink shopping technology, by household income, November 2012
                                                                                                                                          • Safeway’s Just for U loyalty program garners attention as industry game changer
                                                                                                                                          • Food and Drink Shopping Location

                                                                                                                                            • Key points
                                                                                                                                              • Supermarkets are primary food/drink retailers, face competition from mass
                                                                                                                                                • Figure 31: Food and drink shopping location, November 2012
                                                                                                                                              • Consumers are visiting other retailers, not necessarily with food in mind
                                                                                                                                                • Figure 32: Supermarkets and food stores, April 2011-June 2012
                                                                                                                                                • Figure 33: Convenience stores, April 2011-June 2012
                                                                                                                                              • Dollar stores, mass, and club stores grow following
                                                                                                                                                • Figure 34: Change in food and drink shopping behavior, November 2012
                                                                                                                                              • Men can be lured by convenience, women by low price
                                                                                                                                                • Figure 35: Food and drink shopping location, by gender, November 2012
                                                                                                                                                • Figure 36: Attitudes about supermarkets, by gender, November 2012
                                                                                                                                              • Shoppers under age 45 most willing to shop at a range of outlets
                                                                                                                                                • Figure 37: Food and drink shopping location, by age, November 2012
                                                                                                                                                • Figure 38: Choosing a retailer, by age, November 2012
                                                                                                                                              • High-income HHs more likely to seek quality, still look for low price
                                                                                                                                                • Figure 39: Food and drink shopping location, by household income, November 2012
                                                                                                                                                • Figure 40: Attitudes about supermarkets, by household income, November 2012
                                                                                                                                              • Larger HH size means greater range of retail outlets
                                                                                                                                                • Figure 41: Food and drink shopping location, by household size, November 2012
                                                                                                                                              • Presence of children means greater range of retail outlets
                                                                                                                                                • Figure 42: Food and drink shopping location, by presence of children in household, November 2012
                                                                                                                                            • Nontraditional Food Retailers

                                                                                                                                              • Key points
                                                                                                                                                • Men open to nontraditional retailers
                                                                                                                                                  • Remind consumers that food and drinks are an option for purchase
                                                                                                                                                    • Give consumers confidence in products, align with sales mix
                                                                                                                                                      • Present affordable options
                                                                                                                                                        • Figure 43: Thoughts on nontraditional food retailers, by gender, November 2012
                                                                                                                                                      • Consumers under age 55 most open to nontraditional outlets
                                                                                                                                                        • Figure 44: Thoughts on nontraditional food retailers, by age, November 2012
                                                                                                                                                      • Convenience drives interest in range of outlets among HHs with children
                                                                                                                                                        • Figure 45: Thoughts on nontraditional food retailers, by presence of children in household, November 2012
                                                                                                                                                    • Grocery Shopping Expenditures

                                                                                                                                                      • Key points
                                                                                                                                                        • Consumers under the age of 45 spend the most money on groceries
                                                                                                                                                          • Figure 46: Grocery shopping expenditures, by age, April 2011-June 2012
                                                                                                                                                        • Grocery spend correlates with HH income
                                                                                                                                                          • Figure 47: Grocery shopping expenditures, by household income, April 2011-June 2012
                                                                                                                                                        • Larger HHs spend more on groceries
                                                                                                                                                            • Figure 48: Grocery shopping expenditures, by household size, April 2011-June 2012
                                                                                                                                                          • HHs with children spend significantly more on groceries than those without
                                                                                                                                                            • Figure 49: Grocery shopping expenditures, by presence of children in household, April 2011-June 2012
                                                                                                                                                        • Choosing a Food and Drink Retailer

                                                                                                                                                          • Key points
                                                                                                                                                            • Convenience and affordability outweigh health for the average consumer
                                                                                                                                                              • Give shoppers what they want
                                                                                                                                                                • Don’t be limited by location
                                                                                                                                                                  • Figure 50: Attitudes toward shopping for food and drink, by gender, November 2012
                                                                                                                                                                • The role of convenience
                                                                                                                                                                  • Women more amenable to shopping around, could be wooed by promise of one stop
                                                                                                                                                                    • Figure 51: Food and drink shopping behavior, by gender, November 2012
                                                                                                                                                                  • Young shoppers want more from stores, older shoppers want shopping to be easy
                                                                                                                                                                    • Other services
                                                                                                                                                                      • Figure 52: Attitudes toward shopping for food and drink, by age, November 2012
                                                                                                                                                                      • Figure 53: Choosing a retailer, by age, November 2012
                                                                                                                                                                    • Convenience rules for larger households
                                                                                                                                                                      • Figure 54: Attitudes toward shopping for food and drink, by household size, November 2012
                                                                                                                                                                      • Figure 55: Choosing a retailer, by household size, November 2012
                                                                                                                                                                    • The role of price
                                                                                                                                                                      • Price is a major driver for food and drink shopping and must be prioritized by all retailers
                                                                                                                                                                        • Figure 56: Attitudes toward shopping for food and drink, by age, November 2012
                                                                                                                                                                      • Lower income-earning households particularly driven by price consciousness
                                                                                                                                                                        • Figure 57: Attitudes toward shopping for food and drink, by household income, November 2012
                                                                                                                                                                      • Larger households look to save where they can, singles should be nurtured
                                                                                                                                                                        • Figure 58: Attitudes toward shopping for food and drink, by household size, November 2012
                                                                                                                                                                      • The role of health and product quality
                                                                                                                                                                        • Women show a stronger interest in healthful food and drink shopping
                                                                                                                                                                          • Figure 59: Attitudes toward shopping for food and drink, by gender, November 2012
                                                                                                                                                                        • Healthful lifestyle messaging may resonate with older shoppers
                                                                                                                                                                          • Figure 60: Attitudes toward shopping for food and drink, by age, November 2012
                                                                                                                                                                          • Figure 61: Attitudes toward shopping for food and drink, by age, November 2012
                                                                                                                                                                        • Higher-income earners over index in an interest in healthful offerings and store quality
                                                                                                                                                                          • Figure 62: Attitudes toward shopping for food and drink, by household income, November 2012
                                                                                                                                                                          • Figure 63: Attitudes toward shopping for food and drink, by household income, November 2012
                                                                                                                                                                        • Households with children vigilant about making the right choices
                                                                                                                                                                          • Figure 64: Attitudes toward shopping for food and drink, by presence of children in household, November 2012
                                                                                                                                                                          • Figure 65: Attitudes toward shopping for food and drink, by presence of children in household, November 2012
                                                                                                                                                                      • Important Retailer Attributes

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Low price rises to the top of important attributes
                                                                                                                                                                            • “Local” may appeal to different shoppers in different ways
                                                                                                                                                                              • Figure 66: Important attributes, November 2012
                                                                                                                                                                            • Stores shopped matches interest in claims
                                                                                                                                                                              • Figure 67: Important attributes, by food and drink shopping location, November 2012
                                                                                                                                                                            • Store claims more likely to resonate with women
                                                                                                                                                                              • Figure 68: Important attributes, by gender, November 2012
                                                                                                                                                                            • Retailer claims may help younger shoppers with purchase decisions
                                                                                                                                                                              • Figure 69: Important attributes, by age, November 2012
                                                                                                                                                                            • Low-income HHs prefer low-price guarantee over coupons
                                                                                                                                                                              • Figure 70: Important attributes, by household income, November 2012
                                                                                                                                                                          • Impact of Race and Hispanic Origin

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Blacks are drawn to convenience, Asians prioritize cost savings and health
                                                                                                                                                                                • Figure 71: Food and drink shopping location, by race/Hispanic origin, November 2012
                                                                                                                                                                                • Figure 72: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
                                                                                                                                                                              • Black shoppers believe stores represent them
                                                                                                                                                                                • Figure 73: Choosing a retailer, by race/Hispanic origin, November 2012
                                                                                                                                                                              • Blacks exhibit lowest spend, Hispanics spend more than non-Hispanics
                                                                                                                                                                                • Figure 74: Grocery shopping expenditures, by race/Hispanic origin, April 2011-June 2012
                                                                                                                                                                              • Hispanic shoppers are more price conscious than are non-Hispanics
                                                                                                                                                                                • Figure 75: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
                                                                                                                                                                                • Figure 76: Attitudes toward ethnic foods, by race/Hispanic origin, November 2012
                                                                                                                                                                              • Hispanics are interested in one-stop shopping
                                                                                                                                                                                • Figure 77: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
                                                                                                                                                                              • Quality counts among Hispanic shoppers
                                                                                                                                                                                • Figure 78: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
                                                                                                                                                                            • Cluster Analysis

                                                                                                                                                                                • Cluster 1: Supermarket Stalwarts
                                                                                                                                                                                  • Demographics
                                                                                                                                                                                    • Characteristics
                                                                                                                                                                                      • Opportunity
                                                                                                                                                                                        • Cluster 2: Bargain Hunters
                                                                                                                                                                                          • Demographics
                                                                                                                                                                                            • Characteristics
                                                                                                                                                                                              • Opportunity
                                                                                                                                                                                                • Cluster 3: New Guards
                                                                                                                                                                                                  • Demographics
                                                                                                                                                                                                    • Characteristics
                                                                                                                                                                                                      • Opportunity
                                                                                                                                                                                                        • Cluster characteristic tables
                                                                                                                                                                                                          • Figure 79: Target clusters, November 2012
                                                                                                                                                                                                          • Figure 80: Food and drink shopping location, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 81: Food and drink shopping location, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 82: I shop for food and drink more at these outlets than I did 12 months ago, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 83: I shop for food and drink less at these outlets than I did 12 months ago, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 84: Important attributes, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 85: Attitudes and behavior, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 86: Nontraditional food retailers, by target clusters, November 2012
                                                                                                                                                                                                          • Figure 87: Attitudes toward shopping for food and drink, by target clusters, November 2012
                                                                                                                                                                                                        • Cluster demographic tables
                                                                                                                                                                                                          • Figure 88: Target clusters, by demographic, November 2012
                                                                                                                                                                                                        • Cluster methodology
                                                                                                                                                                                                          • Convenience:
                                                                                                                                                                                                            • Price:
                                                                                                                                                                                                              • Health:
                                                                                                                                                                                                                • Quality:
                                                                                                                                                                                                                • Appendix – Other Useful Tables

                                                                                                                                                                                                                  • Food and drink shopping location
                                                                                                                                                                                                                    • Figure 89: Food and drink shopping location, by gender and age, November 2012
                                                                                                                                                                                                                    • Figure 90: Food and drink shopping location, by marital/relationship status, November 2012
                                                                                                                                                                                                                  • Nontraditional food retailers
                                                                                                                                                                                                                    • Figure 91: Nontraditional food retailers, by gender and age, November 2012
                                                                                                                                                                                                                    • Figure 92: Nontraditional food retailers, by household income, November 2012
                                                                                                                                                                                                                    • Figure 93: Nontraditional food retailers, by marital/relationship status, November 2012
                                                                                                                                                                                                                    • Figure 94: Nontraditional food retailers, by household size, November 2012
                                                                                                                                                                                                                  • Important attributes
                                                                                                                                                                                                                    • Figure 95: Important attributes, by gender and age, November 2012
                                                                                                                                                                                                                    • Figure 96: Important attributes, by marital/relationship status, November 2012
                                                                                                                                                                                                                  • Attitudes toward food and drink shopping
                                                                                                                                                                                                                    • Figure 97: Attitudes toward shopping for food and drink, by gender and age, November 2012
                                                                                                                                                                                                                    • Figure 98: Attitudes toward shopping for food and drink, by marital/relationship status, November 2012
                                                                                                                                                                                                                • Appendix – Trade Associations

                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                                                                                  • H. E. Butt Grocery Company
                                                                                                                                                                                                                  • Hy-Vee, Inc
                                                                                                                                                                                                                  • Private Label Manufacturers Association (PLMA)
                                                                                                                                                                                                                  • Proximity London
                                                                                                                                                                                                                  • Publix Super Markets
                                                                                                                                                                                                                  • Stop & Shop

                                                                                                                                                                                                                  The Food and Drink Shopping Experience - US - February 2013

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