Changing Grocery Shopping Patterns

Published by: Datamonitor

Published: Mar. 19, 2008 - 57 Pages

Table of Contents

Overview

Catalyst

Summary

EXECUTIVE SUMMARY

TREND: Value has become the most important influence over store choice

TREND: The desire to trade-up is also shaping shopping behavior

TREND: The types of shopping trip are changing

INSIGHT: Stores have become more specialized in response to the key trends shaping shopper preferences

INSIGHT: Differentiation is noticeable through private label, convenience and healthier eating

INSIGHT: Although most people demand range, for many expanding choice is now too great

INSIGHT: Retailers are adapting to new patterns of grocery shopping

ACTION: Boost your value offerings

ACTION: Help supermarkets to compete other than on price

ACTION: Focus on in-store tactics

Table of Contents

List of Tables

List of figures

THE FUTURE DECODED

INTRODUCTION: Grocery shopping in Europe, North America and indeed around the world is changing in two main ways

Shoppers' attitudes towards the different elements of the retail offer are shifting

Changing attitudes are encouraging the development of new forms of retail channel which shoppers are using in new and different ways

TREND: Value has become the most important influence over store choice

Evidence points to a growth in value-oriented shoppers

The changing nature of the store mix accentuates the influence of value

TREND: The desire to trade-up is also shaping shopping behavior

The rise of the 'sacrificial consumer' reflects the tendency to both trade-up and trade-down

The emerging demand for superior customer service reflects the quality and experience focused shopper

Take-outs and implications: mass market grocery retailing is all about value-for-money

TREND: The types of shopping trip are changing

The average number of shopping trips is increasing

Differences in the frequency of grocery shopping by demographic are minimal

A demographic group that is one of the fastest-growing shopper segments is men

Take-outs and implications: FMCG industry players need to respond to the growing diversity and spontaneity associated with grocery shopping

INSIGHT: Stores have become more specialized in response to the key trends shaping shopper preferences

The rise of grocery discounters reflects the trend towards price-led value

The continuing rise of convenience stores has been an established feature of developed consumer markets

Specialist natural food stores still account for a small proportion of sales but are gaining in popularity

More specialist types of store that cater to the specific needs of their target market tend to be rewarded with greater customer loyalty

Supermarkets and even hypermarkets are under pressure as consumers switch to specialist stores

Take-outs and implications: it is no longer a case of making products available for retail but ensuring the right products are available in the most appropriate channel formats

INSIGHT: Differentiation is noticeable through private label, convenience and healthier eating

Private labels are increasingly considered credible options in the same manner as 'famous brands'

Private label is satisfying shoppers' contradictory demands for premium goods offering good value

The depth and quality of home meal solutions is a big draw for convenience driven consumers

Natural & organic ranges become an increasingly important factor shaping store choices and point-of-purchase behavior

Freshness is a key trend with particularly strong relevance for retailers

There are potential problems associated with expanding ranges

Take-outs and implications: leading retailers are responding to big issues influencing consumers at large

INSIGHT: Although most people demand range, for many expanding choice is now too great

More than half of European and US shoppers agree that there is too much choice

Overwhelmed by choice, consumers are 'speed shopping' and deliberately using a screening filter

This is leading to a more passive approach to shopping

Take-outs and implications: the paradox balance between offering range variety and simplifying the shopping experience is an important issue for retailers to resolve

INSIGHT: Retailers are adapting to new patterns of grocery shopping

Experiments at Wal-Mart reflect the success of fresher, healthier offerings in traditional supermarkets

Discount natural & organic stores are emerging

Tesco is targeting an unmet need with Fresh & Easy stores in the US

Take-outs and implications: the speed of change in the grocery retail landscape is increasing, creating evermore new product development and sales opportunities for manufacturers to seize

ACTION POINTS

ACTION: Boost value offerings through emerging distribution opportunities and new product concepts

Make concerted efforts to supply discounters

Develop value brands

Develop 'everyday luxury' products

Take-outs and implications

ACTION: Help supermarkets to compete on factors other than price

Learn from the success of natural food specialists

Work with retailers to offer best practice meal solutions

Help to reinvigorate center store sales

Understand that retailers will want to use private label

Supply innovative private label products

Take-outs and implications

ACTION: Develop products for convenience stores

ACTION: Focus on in-store tactics to ease choice complexity and communicate with shoppers

Increase in-store advertising

Use in-store marketing to target men

Recognize when choice can be simplified

Take-outs and implications

APPENDIX

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Consumer survey: countries ranked by the growth of value-oriented shoppers

Table 2: Consumer survey: the changing role of value in choosing grocery products among European and US consumers, by country

Table 3: Consumer survey: European countries and the US ranked by the growth of trading-up-oriented shoppers

Table 4: Consumers survey: the changing role of trading-up in choosing grocery products among European and US consumers, by country

Table 5: Consumer survey: European countries and the US ranked by the growth of value-oriented and trading-up-oriented shoppers

Table 6: Consumer survey: European and US consumers' willingness to pay extra for better customer service by age group and country

Table 7: Consumer survey: European and US consumers' willingness to pay extra for better customer service by gender and country

Table 8: Types of US grocery shopping trip by frequency and value

Table 9: Types of US grocery shopping trip by day of the week

Table 10: Consumer survey: average frequency of European and US based grocery shopping by country

Table 11: Consumer survey: the composition of European and US grocery shopping frequency by country

Table 12: Composition of grocery shopping frequency by age group

Table 13: Composition of grocery shopping frequency by household income

Table 14: Value share of discounters in western Europe, by country, 2002-07

Table 15: Value share of convenience stores by country, 2002-07

Table 16: Value share of specialist natural food stores by country, 2002-07

Table 17: Specialist natural food store chains in Germany

Table 18: Value share of supermarkets and hypermarkets in France, Germany and the UK, 2002-07

Table 19: The development of private label, 1970s to 2000s

Table 20: Potential winners and losers from the fresh trend

Table 21: Consumer survey: the extent that European and US shoppers believe there is too much choice when shopping, by age and country

Table 22: Consumer survey: the extent that European and US shoppers believe there is too much choice when shopping, by gender and country

Table 23: Presence of private label in different US grocery store formats, 2002-07

Table 24: Consumers who seek discounts and express satisfaction from value, by country, 2005

Table 25: Penetration of US private label by type of shopping trip

Table 26: Industry opinion: ways in which private label could be better promoted

List of Figures

Figure 1: Value is an increasingly important motivator of consumer behavior

Figure 2: The changing role of trading-up in choosing grocery products

Figure 3: Spanish and Dutch consumers embark on the most grocery store visits per week

Figure 4: The composition of grocery shopping frequency varies by country

Figure 5: Examples of US premium private labels

Figure 6: Supermarket traffic at the perimeter versus the center store

Figure 7: Discount natural & organic stores are emerging across Europe and the US

Figure 8: Tesco Fresh & Easy

Figure 9: Two Buck Chuck wines are a real draw for shoppers seeking price-led value

Figure 10: Charmin Basic and the possible private label response

Figure 11: Larger pack sizes have strong value credentials

Figure 12: Giant Eagle's Market District range reflects an emerging product concept: 'everyday luxury'

Figure 13: Products that suggest a more personal nature can help mass market retailers counter the selling points of smaller, more specialist stores

Figure 14: Featuring actual farmers is a way that Waitrose has personalized its marketing in the UK

Figure 15: Best practice meal solutions in the US include Eat Local, Central Market, Apron's

Figure 16: Whole Foods Market meal solutions

Figure 17: Products developed specifically for the convenience store market

Figure 18: Convenience and premium: Harrods 102 convenience store

Figure 19: In-store marketing; end aisle display and floor advertising

Figure 20: Helping store navigation: Best Cellars

Figure 21: Helping consumer choice: Hormel's Custom Kitchen

Figure 22: Color blocking and unique shapes can be used to create visual contrast

Abstract

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