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The 2010 National Grocers Association-SupermarketGuru Consumer Panel survey illustrates the opportunities that abound this year — if grocers are ready to take their cues from their customers.
Phil Lempert debuts the research today during the National Grocers Association’s (NGA) National Convention General Session, “Marketplace Leadership and Innovation: Companies That Make a Difference,” as he takes the stage with leading retailers and industry insiders.
“It may not feel like it now for the nation’s supermarkets, but America’s exit from one dreg of a decade to another filled with uncertainty could actually harbor great promise,” Lempert explains. “This is an especially sensitive time for millions of American food shoppers, whose psyches are wounded and whose household budgets are broken. Not knowing if they’ll be able to keep their homes, or their jobs, or their retirement savings, people have frozen their spending impulses — even in supermarkets where staples abound, and where luxuries still cost far less than other aspects of ‘the good life’ that many miss.”
Lempert continues: “When they venture to food stores — which could ride the tide of this trend if they play it right — people are intent on saving, paring frills, buying healthy and cooking smarter. With many signs that these behaviors will stick even after an economic rebound, it’s imperative that food stores align their offers with what people want today —because this could well be what people want for years to come.”
And the Survey Says …
Where are consumers shopping these days? The overwhelming majority of survey respondents (85 percent) prefer the familiar local supermarket to buy their majority of foods. Mass-merchandiser stores (including supercenters and classic discount formats) attract 7 percent, and warehouse clubs and specialty food stores 3 percent each, according to the current data.
The highest numbers of respondents who say they shop supermarkets come from some of the lowest-income tiers: 18 percent in the $45,001-to-$65,000 tier, and 16 percent in the $25,00-to-$45,000 tier. The third-most frequent tier, at 10 percent, includes six-figure shoppers earning $85,001 to $105,000, and in fourth at 9 percent are the poorest families, at $25,000 or less.
Apparently, people shop mass for food because they have to. The three lowest-income tiers account for 62 percent of mass shoppers for food. Bargain hunters from the $85,001-to-$105,000 tier come in fourth, at 13 percent — that’s more than twice the frequency of 6 percent cited in last year’s survey. Shoppers from every income tier, even $205,001 and above, are represented in mass.
Consumers share essentially the same conviction for lower prices as a year ago, when the recession caught the country in its grip and prompted a seven-percentage-point hike over the 2008 level. The majority of respondents (51 percent) now say price is “very important” in selecting where they spend the most money on food, and nearly everyone else (45 percent) regards price as “somewhat important.”
A look back at the 2003 report shows that food prices were the foremost reason people shopped at a particular store back then, but just 41 percent of respondents felt this way (best everyday prices 30 percent and best sale prices 11 percent). That’s a full 10 percentage points less than the current findings.
Customers continue to look to grocers for an improved in-store experience. For the second year in a row, “price/cost savings” tops the list of desired improvements, cited by nearly half of respondents (46 percent, down from 48 percent in 2009). The three lowest-income tiers comprise half (50 percent) of those who say this. “More locally grown foods” is the next most sought store upgrade, at 41 percent. “More variety/better assortment/wider choice” comes in third, at 30 percent, a desire expressed more evenly among grocery spenders at all levels than last year.
Tied for fourth, at 22 percent, are “more fresh-made foods” and “better customer service/employees.” The strongest proponents of “more fresh-made foods” are those raising families or transitioning to empty-nester status: the 50-to-64 age group accounts for 49 percent who say this; 40 to 49, 20 percent; and 25 to 39, 17 percent. Quick, convenient meals can help households manage hectic schedules, and this is one solution many respondents want.
There are three differences beyond the top-five wish list, so similar to last year’s: “offer better quality products” soars to 15 percent (from 5 percent in 2009), “nutritional and other health information” rises to 16 percent (from 13 percent), and “more organic foods” rebounds to 20 percent (from 17 percent).
Progressive Grocer editors will report live from the NGA National Convention daily along with live video from Phil Lempert in The Lempert Report. Members of the newly launched Independent Grocer’s Network (IGN), sponsored by Progressive Grocer and NGA, can also discover up-to-the-minute conversations at the social networking platform at www.independentgrocernetwork.com.