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The Food/Drink Shopper: Beyond the Grocery Store - US - June 2015

"While supermarkets continue to dominate retail sales of food and drink, a slight loss of share can be seen from 2005-15. Supermarkets aren’t going the way of dinosaurs; however consumer interest in low price, convenience, and fresh offerings, as well as changing eating habits, drive movement to a wider range of food/drink shopping channels. Supercenters (including mass merchandisers with robust food/drink offerings) and warehouse clubs are picking up the supermarket slack. Key Millennial and Hispanic shopper segments also drive change, exhibiting a greater inclination to seek items and experiences they want, even if it means compromising on price and convenience."
- Beth Bloom, Food and Drink Analyst

This report discusses the following key issues:

  • Supermarkets continue to dominate, but lose slight share
  • iGen/Millennials comprise the largest percentage of grocery shoppers
  • 44% of shoppers are shopping less often at supermarkets
  • Food/drink retailers appear to be getting by on being good enough

This report examines consumer attitudes and behaviors toward shopping for food and drink and toward retail locations that sell food and drink for off-premise consumption in the US market. Estimates of sales of food and drink for off-premise consumption from the USDA’s Economic Research Service are used to examine changes in sales through different retail channels over time. These estimates may differ from estimates published elsewhere due to different sources, definitions, and methodology.

It’s a good time for food/drink retailers. Shoppers appear engaged and open to expanding their horizons on products and shopping experiences. While the tendency is to attempt to maximize appeal, the consumer base is too broad for a scattershot approach. And while price consciousness will require competitive pricing strategies, attention to quality and shopper experience should also encourage patronage. 

 

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Supermarkets continue to dominate, but lose slight share
            • Figure 1: Distribution of expenditures on food and beverages for off-premise consumption, by channel, 2015-15
          • iGen/Millennials comprise the largest percentage of grocery shoppers
            • Figure 2: Grocery shopping responsibility (any shop), by generation (%), March 2015
          • 44% of shoppers are shopping less often at supermarkets
            • Figure 3: Statements related to food/drink shopping (change in supermarket shopping), March 2015
          • Food/drink retailers appear to be getting by on being good enough
            • Figure 4: Correspondence analysis – Characteristics associated with various food/drink shopping locations, March 2015
          • The opportunities
            • Snacking, budgets, and fans of fresh boost opportunity for engagement
              • While low prices carry a strong appeal, other benefits should be considered
                • Figure 5: Factors influencing where consumers buy food/drink (any rank), March 2015
              • Millennials are particularly drawn to convenience, healthy/fresh
                • Figure 6: Choosing a nonsupermarket location, by generation, March 2015
              • What it means
              • The Market – What You Need to Know

                • Supermarkets continue to dominate, but lose slight share
                  • 44% of shoppers are shopping less often at supermarkets
                    • iGen/Millennials comprise the largest percentage of grocery shoppers
                      • Snacking, budgets, and fans of fresh may be boosting shopping frequency
                      • Market Breakdown

                        • Supermarkets continue to dominate, but lose slight share
                          • Figure 7: Distribution of expenditures on food and beverages for off-premise consumption, by channel, 2015-15
                      • Market Perspective

                        • 44% of shoppers are shopping less often at supermarkets
                          • Figure 8: Statements related to food/drink shopping (change in supermarket shopping), March 2015
                        • Search for low prices leads supermarket exodus, but a range of factors come into play
                            • Figure 9: Statements related to food/drink shopping (change in supermarket shopping), March 2015
                          • Consumers are increasing their spend on food away from home
                            • Figure 10: Share of total food expenditures, 2005-15
                        • Market Factors

                          • iGen/Millennials comprise the largest percentage of grocery shoppers
                            • Figure 11: Grocery shopping responsibility (any shop), by generation (%), March 2015
                          • Two thirds of men take sole responsibility for HH shopping
                            • Figure 12: Grocery shopping responsibility, by gender (%), March 2015
                          • Snack habits, budgets, and an interest in fresh may boost shopping frequency
                          • Key Players – What You Need to Know

                            • Dollar sales at supercenters/warehouse clubs grow 61% from 2005-15
                              • Specialty food/other grocery segment grows 72% from 2005-15
                                • Supermarkets lose 3% share from 2005-15
                                  • Internet retailers see limitations to adoption
                                  • What’s Working?

                                    • Dollar sales at supercenters/warehouse clubs grow 61% from 2005-15
                                      • Figure 13: Expenditures on food and drinks at supercenters and warehouse clubs*, at current prices, 2005-15
                                    • Specialty food/other grocery segment grows 72% from 2005-15
                                      • Figure 14: Expenditures on food and beverages at specialty food stores/other grocery stores*, at current prices, 2005-15
                                  • What’s Struggling?

                                    • Supermarkets lose 3% share from 2005-15
                                      • Figure 15: Distribution of expenditures on food and beverages for off-premise consumption – Supermarkets*, 2015-15
                                    • Internet retailers see limitations to adoption
                                    • What’s Next?

                                      • Expansion of shopping tech will answer questions and encourage sharing
                                        • Hybrid in-store/online shopping
                                          • Focusing on the shopper experience
                                          • The Consumer – What You Need to Know

                                            • Less than half of shoppers use supermarkets as their primary channel
                                              • 29% of Millennials visit six or more food/drink shopping locations
                                                • Price leads location choice, followed by freshness, proximity, and brand
                                                  • Online retailers will need to prove efficacy to ease shoppers into a change
                                                  • Primary Shopping Location

                                                    • Less than half of shoppers use supermarkets as their primary channel
                                                      • Figure 16: Primary shopping location for food and drink, by generation, March 2015
                                                    • Hispanics particularly drawn to mass merchandisers
                                                      • Figure 17: Primary shopping location for food and drink, by Hispanic origin, March 2015
                                                    • More than a quarter of shoppers primarily buy food/drink at mass
                                                      • Figure 18: Primary shopping location for food and drink (nonsupermarket locations), March 2015
                                                  • Shopping Frequency

                                                    • Nearly a third of Millennials visit six or more locations
                                                        • Figure 19: Repertoire of types of frequent (at least one time per week) shoppers by location, by demographics, March 2015
                                                    • Shopper Profiles per Channel

                                                        • Frequent supermarket shoppers
                                                          • Figure 20: Food and drink shopping frequency – Frequent supermarket shopper (once per week or more or more often), CHAID tree output, March 2015
                                                          • Figure 21: Food and drink shopping frequency – Frequent supermarket shopper (once per week or more often), CHAID table output, March 2015
                                                        • Frequent mass merchandiser shoppers
                                                          • Figure 22: Food and drink shopping frequency – Frequent mass merchandisers (net) shopper (once per week or more often)**, CHAID tree output, March 2015
                                                          • Figure 23: Food and drink shopping frequency – Frequent mass merchandisers (net) shopper (once per week or more often)*, CHAID table output, March 2015
                                                        • Frequent natural store shoppers
                                                          • Figure 24: Food and drink shopping frequency – Frequent natural store (net) shopper (once per week or more often)**, CHAID tree output, March 2015
                                                          • Figure 25: Food and drink shopping frequency – Frequent natural store (net) shopper (once per week or more often)*, CHAID table output, March 2015
                                                        • Frequent convenience store shoppers
                                                          • Figure 26: Food and drink shopping frequency – Frequent convenience store shopper (once per week or more often), CHAID tree output, March 2015
                                                          • Figure 27: Food and drink shopping frequency – Frequent convenience store shopper (once per week or more often), CHAID table output, March 2015
                                                        • Frequent dollar store shoppers
                                                          • Figure 28: Food and drink shopping frequency – Frequent dollar store (once per week or more often), CHAID tree output, March 2015
                                                          • Figure 29: Food and drink shopping frequency – Frequent dollar store (once per week or more often), CHAID table output, March 2015
                                                      • Factors Influencing Where Consumers Buy Food/Drink

                                                        • Price leads location choice, followed by freshness, proximity, and brand
                                                          • Millennials/Hispanics appear willing to invest a bit more for quality
                                                              • Figure 30: Factors influencing where consumers buy food/drink (any rank), March 2015
                                                          • Choosing a Nonsupermarket Location

                                                            • Low prices are the strongest draw from supermarkets
                                                              • Figure 31: Choosing a nonsupermarket location, by primary food/drink shopping location, March 2015
                                                            • Millennials are particularly drawn to convenience, healthy/fresh
                                                              • Figure 32: Choosing a nonsupermarket location, by generation, March 2015
                                                          • Characteristics Associated with Shopping Locations

                                                            • Mass offers convenience/affordability
                                                              • Supermarkets get by on being good enough
                                                                • Internet retailers still appear as an unfamiliar novelty
                                                                  • Farmers markets lead for experience
                                                                    • Figure 33: Correspondence analysis – Characteristics associated with various food/drink shopping locations, March 2015
                                                                • Limitations to Online Shopping

                                                                  • Waving delivery charges may encourage online trial
                                                                    • Online retailers will need to prove efficacy to ease shoppers into a change
                                                                      • Adoption will start slow, pick up with experience
                                                                        • Figure 34: Limitations to food/drink shopping online, by demographics, March 2015
                                                                    • Appendix – Data Sources and Abbreviations

                                                                      • Data sources
                                                                        • Sales data
                                                                          • Consumer survey data
                                                                            • Consumer qualitative research
                                                                              • Abbreviations and terms
                                                                                • Abbreviations
                                                                                • Appendix – Market

                                                                                  • Expenditures on food and beverages for off-premise consumption
                                                                                    • Figure 35: Expenditures on food and beverages for off-premise consumption, at current prices, 2005-15
                                                                                  • Share of total food expenditures
                                                                                    • Figure 36: Share of total food expenditures, 2005-15
                                                                                  • Expenditures on food and beverages for off-premise consumption, by channel
                                                                                    • Figure 37: Expenditures on food and beverages for off-premise consumption, by channel, at current prices, 2015-15
                                                                                    • Figure 38: Expenditures on food and beverages for off-premise consumption, by channel, at current prices, 2015-15 (continued)
                                                                                    • Figure 39: Expenditures on food and beverages at supermarkets, at current prices, 2005-15
                                                                                    • Figure 40: Expenditures on food and drinks at supercenters and warehouse clubs, at current prices, 2005-15
                                                                                    • Figure 41: Expenditures on food and beverages at specialty food stores/other grocery stores, at current prices, 2005-15
                                                                                    • Figure 42: Expenditures on food and beverages at convenience stores, at current prices, 2005-15
                                                                                    • Figure 43: Expenditures on food and beverages at other retailers, at current prices, 2005-15
                                                                                    • Figure 44: Expenditures on food and beverages at nonstore retailers, at current prices, 2005-15
                                                                                • Appendix – Consumer

                                                                                  • Characteristics associated with various food/drink shopping locations
                                                                                    • Figure 45: Characteristics associated with various food/drink shopping locations, March 2015
                                                                                  • Mean shopping frequency
                                                                                    • Figure 46: Supermarkets and food stores (net any store), by demographics, trend analysis
                                                                                  • Attitudes/opinions about food
                                                                                    • Figure 47: Attitudes/opinions about food, by demographics, November 2013-December 2014
                                                                                    • Figure 48: Attitudes/opinions about food, by demographics, trend analysis
                                                                                  • Grocery shopping expenditures
                                                                                    • Figure 49: Grocery shopping expenditures, by demographics, November 2013-December 2014
                                                                                    • Figure 50: Grocery shopping expenditures, by demographics, trend analysis

                                                                                The Food/Drink Shopper: Beyond the Grocery Store - US - June 2015

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