Grocery brands face new trends in US

26 June 2012

NEW YORK: Shoppers are adapting their grocery buying habits in the US, with "value-seeking", digital technology and the roll out of smaller format stores all making a mark, a study has argued.

Booz & Company, the consultancy, and the Food Marketing Institute, the trade body, polled 2,000 adults, and found the typical household now purchases 650 SKUs a year, a total unchanged from 1980.

Similarly, 61% of interviewees had "always" sought out discounts. But 78% planned to do so going forward, showing how "value-seeking" behaviour will remain in place as the recovery hardens.

These figures stood at 64% and 78% respectively for the number of participants who were "comfortable" acquiring store brands. Such totals also reached 42% and 55% in turn for an acceptance of "living with less".

Another core shift requiring a response, according to the study, is the rise of "technology-enabled" shoppers, as 52% of respondents are using digital tools on the path to obtaining grocery goods.

"While some of the online and mobile activity is related to making lists, searching for recipes, and similar activities, the majority of shoppers' technology use is around value discovery - finding and acting on the best deals to stretch their grocery budgets," the study added.

Elsewhere, some 32% of respondents said they reclaimed online coupons, 31% used mobile phones for the reasons outlined above, and 23% checked prices at multiple stores on the web before buying. A 25% share of shoppers used at least two such channels, and 9% used all three.

Elsewhere, the analysis suggested that the web has "quietly encroached" on the grocery sector. The typical consumer making category purchases in this way spent 4% of their grocery budget on the net.

More specifically, 1% of the panel made "a lot" of category purchases via this route, constituting 0.4% of total demand. A further 53% did some in at least some categories.

A quarter of shoppers also now visit smaller format bricks and mortar stores. Hard discounters in this segment were seen as providing the lowest prices by 82% of relevant shoppers, and providing high-value store brands by 48%, leading on both these counts.

Small format fresh food markets headed the charts in terms of providing fresh food on 37%, offering a good selection of pre-packaged meals on 26%, delivering fast checkout times on 43%, and allowing for simple store navigation on 34%. Dollar stores claimed second on all these metrics.

"These formats have made lower operating cost structures a competitive advantage as they captured the wallets of many shoppers across the nation," the study said.

"They are responsible for mopping up much of the industry's anaemic growth. However, not every incumbent can manage them effectively."

Data sourced from Booz & Company; additional content by Warc staff