Price still key for US grocery shoppers

21 December 2012

NEW YORK: Price remains the main consideration behind grocery purchases in the US, but shoppers can also be encouraged to pay a premium by factors like eco-friendly packaging, a study has revealed.

PricewaterhouseCoopers, the professional services firm, polled 6,000 adults about their experiences in a wide range of industries, and broke out the findings for the grocery sector.

It reported that 98% of consumers still buy such products in physical stores. More specifically, some 37% of respondents agreed price was the primary influence on their purchase decisions.

Convenience recorded 28% on this metric, ahead of inventory breadth on 5%. Possessing a reward card for the store concerned registered 5% here, with the vendor's reputation on 4%.

However, the analysis found that customers were willing to pay a 14% premium if guaranteed excellent service from a checkout attendant, a total reaching 11% for knowledgeable staff.

Loyalty points offering storewide discounts would stimulate shoppers to meet a 10% hike in prices, standing at 9% for eco-friendly packaging, as well as 4% for organic and locally-sourced lines and 2% for providing in-store and online routes to purchase.

More than two-thirds of participants had been through a bad experience with a grocery retailer. A 40% share of this group had "looked for better options" at other chains.

The study also discovered that 46% of the sample would not report these issues to a grocery retailer, a figure falling to 24% for banking and 21% for media and communications.

However, fully 92% shared negative views with friends and family, and 82% of web users spread them via this channel. One in three referred to problems they encountered for at least six months.

Staff quality impacted where people shopped a third of the time. A 48% share of the panel agreed store employees were a "good experience driver" and 32% called them a "bad experience driver".

"Grocers should not only accept, but relish their role as the testing ground for best-in-class customer experiences," said Susan McPartlin, PwC's US retail & consumer sector leader.

"Leading grocers must balance the threats of fierce competition, commodity price fluctuations and margin pressures, while meeting changing customer expectations and determining how to deliver an omnichannel experience."

Data sourced from PricewaterhouseCoopers; additional content by Warc staff