For as much as shoppers want to find great value while grocery shopping, it’s important to remember that they won’t sacrifice on quality. Black grocery shoppers will find stores with better prices, stock up on sale items, buy store brands, use coupons and leverage loyalty programs long before they’ll cook with cheaper ingredients or buy marked-down food that’s close to its expiration date. Stakeholders that want to win on value need to do so in a way that does not take away from quality.
The good news for grocery brands is that the economy is moving in a direction where budgets won’t be quite as tight as they have been. GDP is consistently positive, inflation and interest rates are down and Black consumers are feeling better about their finances. That creates more spending flexibility for brands to demonstrate their quality rather than focusing on economy-driven price sensitivity.
Looking ahead, both opportunities and threats will stem from the potential to get shoppers to switch where they buy and what they buy. Many shop at multiple stores, while others are switching to lower-priced options to save money. Those behaviors open the door for competitors to win a larger share of their baskets, which is simultaneously an opportunity and threat for stakeholders.
This report looks at the following areas:
- Impact of economic trends like inflation and interest rates on shoppers’ budget flexibility
- The role of value and quality in what shoppers buy and where they buy it
- How shopper behaviors like using multiple stores and switching to cheaper brands is an opportunity for brands to steal market share
- How Black consumers prioritize Black-owned businesses in grocery shopping
- Examples of brands taking steps to stand out in a competitive market by connecting with Black consumers
Quality is paramount in grocery and will remain so as the economy stabilizes and Black shoppers feel more confident about their finances.
Courtney Rominiyi, Multicultural Consumer Insights Analyst
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EXECUTIVE SUMMARY
- What you need to know
- Consumer trends: key takeaways
- Market predictions
- Opportunities
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MARKET DYNAMICS
- Target audience overview
- Black consumers are a large group, but regionality should be considered when targeting
- America’s traditional grocery landscape is very regional
- Median income among Black households is below the national average
- Graph 1: median income, all households vs Black householders, 2022-23
- While growth has outpaced the total in recent years, increases begin to slow
- Graph 2: median income, all households vs Black householders, 2022-23
- Graph 3: median household income % annual change, by Black and by total, 2012-23
- Black grocery shoppers have less access to fresh groceries
- Black consumers are more likely than average to live in condos/apartments
- Graph 4: type of home, Black consumers vs overall, 2024
- Market context
- Grocery sales are up modestly
- US: changes in food CPI, 2021-24
- The US economy expanded by 3% in Q2 2024
- Graph 5: quarterly real GDP growth, 2020-24
- Consumers are feeling better about their finances
- Graph 6: financial situation compared to a year ago, 2023-24
- Black consumers have fared better than average
- Graph 7: financial situation compared to a year ago, overall vs Black consumers, 2024
- Lower inflation is likely contributing to those financial attitudes
- Graph 8: headline CPI and core CPI, 2021-24
- Americans have negative attitudes toward the grocery industry
- A declining interest rate also alleviates budget pressures
- Graph 9: Federal Funds effective interest rate, 2018-24
- What a Trump presidency means for Black consumers and grocery shopping
- There are positive signs for Black consumers’ budgets and spending
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Consumer Insights
- Consumer fast facts
- Consumer fast facts continued
- Grocery shopping frequency and channel usage
- Black consumers go grocery shopping less often than average
- Graph 10: grocery shopping frequency, Black consumers, 2024
- Graph 11: grocery shopping frequency, 2024
- Lower frequency is likely a result of accessibility
- Shopping frequency varies greatly in urban areas
- Graph 12: shop for groceries more than once a week, by living area, 2024
- Graph 13: shop for groceries more than once a week, Black consumers by living area, 2024
- Certain sub-groups shop more frequently than others
- Graph 14: shop for groceries once a week or more, Black consumers by generation, household income, parental status and gender, 2024
- Despite frequency differences, channel usage is similar to average
- Graph 15: how groceries were purchased in the past three months, Black consumers, 2024
- Graph 16: how groceries were purchased in the past three months, 2024
- Younger people, parents and large households buy groceries online
- Graph 17: any online grocery shopping in the past three months (NET), Black consumers by generation, parental status, gender and household size, 2024
- Living situations can also affect demand for online grocery
- Graph 18: any online grocery shopping in the past three months (NET), Black consumers by employment status, household income and living area, 2024
- Identifying opportunities for online grocery shopping
- There are meaningful barriers to online grocery shopping
- Graph 19: attitudes toward online grocery shopping, Black consumers, 2024
- Online grocery has specific use cases
- Graph 20: where most likely to shop for groceries by situation, Black consumers, 2024
- What this means
- Where shoppers are shopping
- Mass merchandisers are leaders in the grocery market
- Graph 21: where groceries are purchased, Black consumers, 2024
- The competitive landscape varies by region
- Graph 22: mass merchandisers and grocers, Black consumers by region, 2024
- At this point, natural supermarkets don’t have national appeal
- Graph 23: where groceries are purchased – natural supermarkets, Black consumers by region, 2024
- Regional strategies are a big reason for these differences
- Mass merchandisers’ grocery success is supported by their broad selection
- Graph 24: stores shopped at in the past 12 months, Black consumers, 2024
- Value is a key strength of mass merchandisers
- Graph 25: reasons to shop at mass merchandisers, Black consumers, 2024
- Graph 26: good value, Black consumers, 2024
- Mass merchandiser usage is also a function of grocery access
- Grocery distribution programs try to offset inaccessibility to food
- Shoppers’ incomes also impact where they shop
- Graph 27: where groceries are purchased, Black consumers by household income, 2024
- Gen Z is more likely to shop at dollar stores than traditional supermarkets
- Graph 28: traditional supermarkets vs dollar stores, Black consumers by generation, 2024
- Mass merchandisers can leverage national appeal while grocers remain fragmented
- Top factors when choosing where to shop
- Value and quality are the top decision factors
- Graph 29: top factors when choosing where to shop for groceries, 2024
- Graph 30: top factors when choosing where to shop for groceries, Black consumers, 2024
- Finances have rebounded, but still just one third have a “healthy” financial situation
- Graph 31: current financial situation, 2021-24
- Graph 32: current financial situation, Black consumers, 2021-24
- Price is a top-of-mind topic
- The importance of price is universal
- Quality considerations are more common among older shoppers
- Graph 33: any rank) – quality of fresh products, Black consumers by employment status, 2024
- Graph 34: any rank) – quality of fresh products, Black consumers by age and gender, 2024
- Younger grocery shoppers are more experiential
- Graph 35: any rank) – unique items and free samples, Black consumers by generation, 2024
- Start with value and quality, then work from there
- Ways of saving money while grocery shopping
- Consumers try to pay less for the products they want
- Graph 36: ways of saving money while grocery shopping, Black consumers, 2024
- Shoppers won’t sacrifice quality
- Graph 37: ways of saving money while grocery shopping, Black consumers, 2024
- Store brands are a key tactical opportunity for retailers
- Quality is a pivotal aspect of store brands
- Younger shoppers and parents have positive perceptions of store brands
- Graph 38: any agree), Black consumers by age and parental status, 2024
- Store brands and food are a natural fit
- Graph 39: purchased a store brand in this category at a mass merchandiser in the past 12 months, Black consumers, 2024
- Certain categories have more store brand opportunities than others
- Graph 40: brand preference by grocery category, Black consumers, 2024
- Store brands are stepping up to compete with name brands
- Single men are an opportunity to increase loyalty program usage
- Graph 41: ways of saving money while grocery shopping – redeeming loyalty program rewards, Black consumers by parental status, marital status and gender, 2024
- Older men are the least likely to use loyalty to save
- Graph 42: redeeming loyalty program rewards, Black consumers by age and gender, 2024
- Use the proper channels to connect with these consumers
- When it comes to saving on groceries, meet shoppers in the middle
- Opportunities to win consumers over
- Multiple store visits opens up the door to upsell and increase basket sizes
- Women (especially middle-aged) are the most likely to use multiple stores
- Graph 43: “I need to shop at multiple stores to get all of the groceries I want,” Black consumers by age and gender, 2024
- Multi-store shopping skews to natural supermarkets and warehouse clubs
- Graph 44: “I need to shop at multiple stores to get all of the groceries I want,” Black consumers by where they buy their groceries, 2024
- Multi-store shopping isn’t a budgeting tactic – it’s product-focused
- Graph 45: “I need to shop at multiple stores to get all of the groceries I want,” Black consumers by household income and employment status, 2024
- Correlation with demand for Black-owned brands further highlights how products drive multi-store visits
- Graph 46: “I need to shop at multiple stores to get all of the groceries I want,” Black consumers by “I am more likely to purchase a product if it is from a Black-owned brand”, 2024
- Using multi-store shopping habits as an opportunity
- Switching=opportunity
- Unlike multi-store shopping, switching is related to finances
- Graph 47: “I’ve switched to a cheaper brand/product to save money in the past year,” Black consumers by household income, employment status and homeownership status, 2024
- Gen Z and parents are the most likely to switch
- Graph 48: “I’ve switched to a cheaper brand/product to save money in the past year,” Black consumers by generation and parental status, 2024
- Switching to cheaper brands is an opportunity for store brands
- Graph 49: “I’ve switched to a cheaper brand/product to save money in the past year,” Black consumers by “The quality of store brand products is about the same as name brands”, 2024
- Value-focused store brands can strike a chord with these shoppers
- Walmart and Target use this simplified approach to demonstrate value
- Positioning value brands as a timely solution
- Consumer attitudes toward Black-owned businesses
- There’s interest in Black-owned brands, but it has a limit
- Graph 50: attitudes toward Black-owned businesses, Black consumers, 2024
- Young men and dads are key targets for Black-owned businesses
- Graph 51: any agree), Black consumers overall vs dads and 18-34 men, 2024
- Focus on platforms those consumers use most
- Graph 52: visit site daily, Black consumers overall vs dads and 18-34 men, 2024
- Leveraging social media to talk to these consumers
- Behaviors don’t always follow attitudes
- Challenges for Black-owned brands
- H-E-B’s support for Black-owned brands helps it connect with Black grocery shoppers
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INNOVATION AND MARKETING STRATEGIES
- Launch activity and innovation
- Walmart went on the road to promote Black-owned brands
- Local co-ops are bringing fresh groceries to underserved markets
- Online grocery opens the door for online retailers
- Marketing and advertising
- Eggo is supporting Black farmers
- Getting creative with loyalty programs
- Aldi promotes its store brand with strategic partnerships
- Opportunities
- In a highly competitive industry, retailers need to find ways to stand out
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Appendix
- Consumer research questions
- Consumer research question crosstabs
- Consumer research methodology
- Generations
- Abbreviations and terms
- Author
- Contributor
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