Changing Grocery Shopping Patterns

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