Home » Value, Technology, New Formats Shaping Grocery Industry

Value, Technology, New Formats Shaping Grocery Industry

Last updated on June 13th, 2024 at 11:55 am

Food Marketing Institute (FMI) previewed the findings of its 2012 U.S. Grocery Shopper trends research on May 1 in a presentation by FMI President and CEO Leslie G. Sarasin, addressing participants at FMI2012, the Food Retail Show in Dallas. Seeking to help retailers shape their strategies for future growth, Sarasin identified and examined the implications of four significant and interrelated movements.

Undergirded by data provided by FMI research partner and global consulting firm Booz & Co., and making use of video, social media, and an expert panel of food retailers, Sarasin’s presentation focused on the significance of the following four trends, laying the groundwork for a broader FMI and Booz & Co. collaborative education series in the coming months.

Value-Seeking as a Way of Life: Consumers responded to the 2007-2009 recession by choosing private brands and less expensive food options, making fewer trips and buying fewer items at the grocery store, shopping around for deals, and generally seeking value in their grocery shopping. Interestingly, even consumers in segments not directly affected by the recession exhibited some of these behaviors. As the slow economic recovery continues, research indicates these cost-cutting behaviors are persisting and will continue to do so in the immediate future. This has resulted in a “new normal,” reshaping consumer shopper patterns.

Technology as a Fact of Shopping Life: More than half of all shoppers now use technology either before or during their shopping trips. Much of this activity focuses on “value discovery”—deals, coupons, price comparisons, etc. As technology improves, more and more customers will be able to readily discover the lowest prices for the goods they want. In a world in which the lowest price can be located with a few swipes or clicks, retailers are encouraged to utilize online means to build relationships with customers.

Online Shopping Eating Away at Center Store: More than a decade has elapsed since online grocer Webvan sank without a trace. But online grocery shopping is making a comeback, as specialist online retailers carve out target categories. Sales numbers of these new specialists now equal those of full-line e-commerce grocers. Online “old-timers” also continue to chip away at key categories with simple searching and subscription purchasing. More than half of shoppers buy a grocery category online at least occasionally. As digital natives become household shoppers, this is likely to become much more common, pushing retailers to look for ways to better blend their bricks-and-mortar stores with their (or others’) online presence.

Format Innovation Pointing to New Differentiators: Over the last five years, the grocery industry has added approximately 150 million s.f. of new capacity. None of that new space was built by traditional supermarket retailers; rather, it was added by supercenters, dollar stores, drugstores, and other small formats like fresh specialists and hard discounters. New formats continue to expand, making it more likely that tomorrow’s shopper will have a landscape of options to meet any and all of his or her food retail needs. In this environment, retailers will seek ways to differentiate themselves through merchandise selection, value, convenience, in-store services, customer relationships and innumerable combinations of these attributes.

FMI and Booz & Co. will release a report detailing these trends in addition to a series of webinars. More information will be available in May to FMI members.

Joining Sarasin for a discussion of the results of the latest research into emerging shopper behaviors were panelists Steven Smith, president and CEO, K-VA-T Food Stores; Fred Morganthall II, president and COO, Harris Teeter Supermarkets; Jerry Garland, president and CEO, Associated Wholesale Grocers; and Chris Coborn, president and CEO, Coborn’s.

About the author

Shelby Team

The Shelby Report delivers complete grocery news and supermarket insights nationwide through the distribution of five monthly regional print and digital editions. Serving the retail food trade since 1967, The Shelby Report is “Region Wise. Nationwide.”

Featured Photos

Featured Photo IDDBA Annual Convention
George R. Brown Convention Center
Houston, TX