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Supermarkets remain the primary source for grocery shopping, and although mass merchandisers remain the greatest competition, supermarkets are facing challenges from new retail formats as well, dollar stores in particular.
According to Perception Research Services International’s (PRS) second annual shopper research survey, supermarkets maintain their stronghold on shopper activity, with 91 percent having purchased groceries in the past three months (in line with last year’s 92 percent). Although mass merchandisers remain the largest competitive threat - 73 percent purchased groceries from a mass merchandiser, down from 76 percent in 2011 - the survey reveals that dollar stores are gaining momentum as the percentage of dollar store shoppers increased from 32 percent in 2011 to 35 percent in 2012. Alternatively, consumer activity at drug and convenience stores is holding steady relative to last year (46 percent/47 percent and 23 percent/24 percent, respectively).
While consumers generally purchase food and beverages at the same rate across mass merchandisers and dollar stores, cleaning supplies and personal care items are purchased more often at dollar stores. In addition to these items, shelf stable products at dollar stores are most competitive with mass merchandisers. These findings are consistent with 2011 results where shoppers indicated buying fewer cleaning and personal products in supermarkets in the prior three months. Accordingly, the preference to purchase these items at dollar stores is driving the shift away from supermarkets and mass merchandisers.
Shoppers target specific retailers for different needs, specifically:
- Supermarkets for selection
- Mass merchandisers and dollar stores for price
- Drug and convenience stores for convenience
"Our latest findings on grocery shopping indicate how very discerning today's shoppers are – about their venue preferences as well as brand choices," said Jonathan Asher, executive VP at Fort Lee, N.J.-based PRS. "Retailers must understand their competitive strengths and capitalize on them, while also making the necessary adjustments to their offerings to seize opportunities for a larger slice of the pie as shoppers are more open to new shopping possibilities than they have been since the 1950's with the advent of large, supermarket chains."
Since 2008’s economic downturn, shoppers have tried to reduce their grocery bills. During 2012, more shoppers used sales/coupons (83 percent) and quantity/size control (70 percent) to save money than in 2011. This year, significantly more shoppers claimed to have switched brands to curb costs (61 percent versus 49 percent).
PRS specializes in shopper research to develop, assess and improve in-store communications, including packaging and merchandising systems. PRS conducts over 800 studies annually on behalf of marketers, designers and manufacturers. PRS’ second annual shopper research survey was conducted among 1,500 shoppers during June of this year.