Category Archives: Grocery shopping trends

Supermarkets Dealing With a Sea Change in Soft Drinks

According to Beverage digest, carbonated soft drink volume declined 3% in 2013.  This follows a 1.2% decline in 2012 and a 1% decline in 2011.

This decline happened in spite of huge budgets set aside for marketing, advertising and promotion expenses.  Both Pepsi™ and Coke™ have spent significant funds to try to stem the tide.  Pepsi announced that they are going to spend $600MM more and Coke is supporting its brands with an increase of $1Billion in the budget for marketing, selling, advertising and promotion. 

Replacing both regular and diet brands of soda are water, tea, and energy drinks.

What does this sea change (let’s face it, these declines are a sea change!) mean for supermarkets and convenience stores when stopping in to pick up a six pack of Coke or Pepsi was a regular event for many shoppers?

Do they stop in as often for water or energy drinks?

Do stores get the regular “go with” items that used to come along with the soda?

More Accurate Food Shopping Predictions?

Since a number of past posts have focused on emerging food-shopping trends, it is sometimes interesting to take a look in the “rear-view mirror” to see if the predictions were, in fact, accurate.

Here’s a good example… a 2007 supermarketnews.com article, predicted three “new” food shopping trends were emerging. Here are the three trends… what do you think…, were they right, or not?

Meal-assembly:
Nearly 80% of consumers indicated it was very important to eat dinner with their kids every night,  but many did not do so because they didn’t have the time. Those trends would lead to the proliferation of meal-assembly centers, which would enable people to combine ingredients to make a dinner, then bring it home to cook.

“Since many Americans are starved for time, they are doing more “assembly” cooking — combining a few different ingredients to make a meal, rather than preparing meals from scratch,” said Tom Vierhile, director of Productscan Online, Naples, N.Y., which is owned by Datamonitor.

Healthy Products:
Americans are becoming more interested in eating more fresh, healthy foods, and this extends beyond the natural and organic trend.

Ethical Purchasing:
It was also predicted that shoppers would be doing more ethical purchasing in the future, which could involve buying more “Fair Trade,” “Certified Humane” and “better for the environment” foods.

Seems to me they were right on the money!

Food Shopping Decisions: Price v. Convenience

In an earlier post we noted that San Francisco based Instacart had begun providing grocery delivery to customers in the Chicago area.  With Instacart, customers can place orders from a “catalog” of thousands of items and from a variety of stores including traditional supermarkets, Trader Joe’s, and Costco and receive same day delivery.

In fact, for an increased fee, Instacart offers 1 or 2 hour service.
In the Los Angeles and San Francisco markets, Instacart competes directly with AmazonFresh, Amazon’s home delivery service for grocery and other like items.  Amazon tested its model for almost five years in Seattle before bringing it to California.

Everyone who knows Amazon knows that they have historically competed on price.  But a recent article in Supermarket News found that in the Los Angeles market, AmazonFresh is not the low cost provider, as WalMart to Go and Instacart are both less expensive than Amazon!

Combine that with the annual $299 fee for AmazonFresh (an Amazon Prime membership is included) and it’s unclear to most Amazon watchers what Amazon will do next to compete.  For now, they say they are competing on convenience and time saving.

Is that a workable model? It certainly sounds as though Instacart with lower prices (and no annual fee), is pretty convenient too!

Private Label Sales Growth for Some Supermarkets?

In a recent post we commented on the fact that overall,  growth in private label sales has slowed and that the overall market for  private label is stagnant.  

But we know  that some retailers are having lots more success than others and that while  some retailers are slowing, others are having great success.  

Let’s take a look at Kroger and their private
label brand Simply Truth and Simply Truth Organic, which were launched in
2012.
  In a recent Food Business News article, it was reported that Kroger expects  this private label brand to surpass $1 Billion in annual sales by the end of 2014!  It would then follow that in Kroger stores, we should expect to see  more shelf space allocated to this group of private label products, and with this  kind of success, we know success is possible.  

For those retailers that are not experiencing the success of private
label, why not?
  Economic conditions are  likely never going to be any better for private label than they have over the  past few years.  

Connecting the Customer for a Better Supermarket Shopping Experience

Dick Boer, chief executive officer of the Dutch-based retailer Ahold, set a strategy he called “reshaping retail” that contemplated using Ahold’s local brands with its global size and scale to grow behind shopper demands for convenience and value.

“Connecting the customer is the most important thing supermarkets can do,” said Boer. As evidence, according to a recent Supermarket News article the company last year began building dedicated pick-up points to aid efficient delivery and convenience for its shoppers. In 2014, Ahold will open a 300,000-square-foot semi-automated warehouse in Jersey City, N.J., that will help to bring more efficiency — and the expectation for a substantial increase in volume — to fulfilling Internet and mobile orders.

In the Northeast, Ahold has generally been picking orders using “warerooms” — auxiliary space at selected Stop & Shop stores — to fulfill Internet orders. Some Stop & Shop stores in New England have also been “completely digitized” allowing shoppers to shop, scan and pay with their mobile phones.

The article goes on to explain that Ahold’s focus on online shopping is a response to what Boer feels is a major shift in consumer behavior, brought about by the growing prominence of the Internet and mobile devices, and by changes in the food retail landscape resulting in greater competition for sales.

But the changes are not only sparking investment in Ahold’s online business and customer loyalty efforts, but also in the value proposition at physical stores, which to Boer means improved fresh departments, price reductions where necessary, and a tiered private-label strategy allowing customers to “shop with the wallet you have.”

Either way, this is a good example of the effort required to evolve and meet the emerging demands of today’s supermarket shopper.

Supermarket Shoppers Might Be More Selective Than We Think

A recent piece in New Hampshire Business Journal (February 6, 2014) referenced a study by Catalina Marketing which conducted a year-long study of the purchasing behavior of 32 million shoppers.

The study, which was published 12/6/13, is called, ‘Engaging the Selective Shopper.”  9,968 stores participated in the study and those stores averaged 35,372 UPCs.  Some of the interesting findings:

  • Over the course of a year, shoppers purchase less than 1% of the available UPC’s in the stores where they shop.  Over the course of a year, the shoppers bought an average of 260 different items
  • The BuyerGraphicsTM of each shopper are unique and shoppers across age and income are similarly selective
  • Promotions may not be as useful as retailers think or hope.  When Catalina studied one major retailer’s promotional flyer, 67% of shoppers did not buy even 1 of the 1,172 advertised items.  They then looked at the following week’s flyer (from the same retailer) and 74% of the baskets did not contain even one of the items promoted in the flyer.