Author: Mintel Group Ltd.
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Grocery Store Retailing - US - January 2011

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer data
Advertising clips
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Grocery products market grows minimally in 2010
Non-supermarket channels continuing expansion into grocery
Consumer spending may stay restrained beyond recession
More shoppers buying only what they need rather than stocking up
Supermarkets still seen as not offering the best value proposition
New product introductions down during 2009-10, but there are highlights
Grocery marketing strategies focus on value and freshness
Who is the grocery consumer and where do they shop?
INSIGHTS AND OPPORTUNITIES
Drive-thru retailers
Going beyond eco-friendly: labeling of products as animal-friendly
Let the children play—in-store play areas may drive business/loyalty
Make it easier for patrons to be healthier, while also driving loyalty
Pharmacists offering food “prescriptions”
Promote private label for meal solutions
Wider adoption of nutritional rating systems
INSPIRE INSIGHTS
Trend—New Fundamentalism
MARKET SIZE AND FORECAST
Key points
Supermarkets and specialty channels losing sales to formats perceived as offering better value
Figure 1: Expenditures for food at home, share by type of retail channel, 2000-10
Non-supermarket total U.S. retail sales expected to continue outselling supermarkets
Sales and forecast for all grocery products selling through FDMx channels
Figure 2: Total FDMx sales of grocery products*, at current prices, 2005-15
Sales and forecast for all products selling in supermarkets
Figure 3: Supermarket sales of grocery products*, at current prices, 2005-15
Figure 4: Supermarket sales of grocery products*, at inflation-adjusted prices, 2005-15
Sales and forecast for all products selling in drug/other outlets
Figure 5: Drug/other outlet* sales of grocery products**, at current prices, 2005-15
Figure 6: Drug/other outlet* sales of grocery products**, at inflation-adjusted prices, 2005-15
Fan-chart forecast
Figure 7: FDMx sales of grocery products*, with fan-chart forecast, 2005-15
Walmart sales
MARKET DRIVERS
Consumers are interested in trying to eat better
Hispanics favor supermarkets for grocery shopping
Price index forecast favorable for at-home food purchases
Figure 8: Consumer Price Index: all food, food at home and food away from home, 2008-11
Shoppers cutting back on stocking up
Sustainability of growing interest to younger shoppers
COMPETITIVE CONTEXT
Key points
Drug and dollar stores aggressively ramping up grocery efforts
Food deserts provide reservoir of opportunity
Getting store brand/name product assortment right
Frugality may extend beyond recession
Online grocery emerging around the world and in the U.S.
Technology as a competitive advantage
FORMAT DEVELOPMENTS—SUPERMARKETS
 OVERVIEW
Supermarkets
Retailers promoting BFY product choices
FORMAT DEVELOPMENTS—DRUG STORES
Overview
Walgreens
CVS
FORMAT DEVELOPMENTS—MASS MERCHANDISERS
Overview
Walmart
Target
FORMAT DEVELOPMENTS—CLUB STORES
Costco
Sam’s Club
FORMAT DEVELOPMENTS—DOLLAR STORES
Overview
Dollar General
Family Dollar
Dollar channel posing threat to Walmart and other discount outlets
FORMAT DEVELOPMENTS—ONLINE
Overview
Peapod
Amazon
PRIVATE LABEL IMPACT ON GROCERY OPERATIONS
Overview
Private label gains market share across all FDMx departments
FDMx sales by department, with private label sales
Figure 9: FDMx sales, by department, with private label sales, 2009 and 2010
Private label accounts for nearly a fifth of supermarket sales
Supermarket sales by department, with private label sales subtotal, 2009-10
Figure 10: Supermarket sales, by department, with private label sales, 2009 and 2010
Private label programs reinforce retailer’s brand identity
Successful private label over-the-counter (OTC) and HBA programs boosting drug stores’ grocery sales as well
INNOVATIONS AND INNOVATORS
Key points
Product introductions, 2005-10
Figure 11: Private label product introductions, by grocery retailer, 2005-10
Figure 12: New product introductions, by department and category, 2005-10
Private label product innovations
BFY
Premium
Value
Non-food
MARKETING STRATEGIES
Key points
 SUPERMARKET MARKETING STRATEGIES
Supermarkets increasing ad spending to project new pricing image
Target getting fresh with its food marketing
Target updates coupon processing policy
Walmart and P&G “go Hollywood” to boost sales
Advertising effectiveness in grocery stores
Figure 13: Influence of in-store advertising on consumer behavior, by age and gender, April 2009-June 2010
Target and Walmart putting best face forward in social media
 TELEVISION COMMERCIALS
Aldi
Figure 14: Aldi, “Honest to Goodness Savings,” June 2010
Kroger
Figure 15: Kroger, “Tested for the Things that Matter,” June 2010
Publix
Figure 16: Publix, “Where Shopping is a Pleasure,” August 2010
Target
Figure 17: Target, “Expect More. Pay Less.,” October 2010
Walmart
Figure 18: Walmart, “Save Money. Live Better.,” March 2010
OUTLETS WHERE CONSUMERS BUY GROCERIES
Key points
The grocery shopper
Figure 19: Grocery shopping frequency, by gender, September 2010
Figure 20: Grocery shopping frequency, by gender and age, September 2010
Figure 21: Grocery shopping frequency, by gender and household income, September 2010
Outlets shopped
Figure 22: Types of stores where shoppers buy groceries, by gender, September 2010
Figure 23: Types of stores where shoppers buy groceries, by age, September 2010
Figure 24: Types of stores where shoppers buy groceries, by household income, September 2010
GROCERY SHOPPING FREQUENCY AND SPENDING BY OUTLET
Key points
Frequency
Figure 25: Frequency of grocery shopping, September 2010
Frequency of visits at top outlets
Supermarkets
Figure 26: Frequency of grocery shopping at supermarkets, by household income and age, September 2010
Mass merchandisers
Figure 27: Frequency of grocery shopping at specific mass merchandisers, by household income and age, September 2010
Club stores
Figure 28: Frequency of grocery shopping at club stores, by household income and age, September 2010
Spending on groceries by outlet/outlet type
Figure 29: Spending on groceries, by outlet/outlet type, September 2010
THE SUPERMARKET SHOPPING CART
Key points
What consumers buy at supermarkets
Figure 30: What consumers buy at supermarkets versus other outlets, September 2010
Figure 31: What consumers buy at supermarkets versus other outlets, by age, September 2010
Figure 32: What consumers buy at supermarkets versus other outlets, by household income, September 2010
Figure 33: What consumers buy at supermarkets versus other outlets, by race/Hispanic origin, September 2010
WHY SHOPPERS PREFER SUPERMARKETS
Key points
Reasons consumers choose supermarkets
Figure 34: Reasons for choosing supermarkets, September 2010
Figure 35: Reasons for choosing supermarkets, by age, September 2010
Figure 36: Reasons for choosing supermarkets, by race/Hispanic origin, September 2010
WHAT SHOPPERS DON’T BUY AT SUPERMARKETS AND WHY
Key points
What and why
Figure 37: What and why consumers don’t buy at supermarkets versus other outlets, September 2010
What and why
Figure 38: Reasons for not buying groceries at supermarkets, September 2010
Figure 39: Reasons for not buying groceries at supermarkets, by household income and age, September 2010
SUPERMARKET INNOVATIONS/IMPROVEMENTS CONSUMERS WANT
Key points
Innovations and improvements interesting to supermarket shoppers
Figure 40: Innovations and improvements consumers would like in supermarkets, by gender, September 2010
Figure 41: Innovations and improvements consumers would like in supermarkets, by age, September 2010
Figure 42: Innovations and improvements consumers would like in supermarkets, by household income, September 2010
CLUSTER ANALYSIS
Pricers
Demographics
Characteristics
Opportunity
Selectors
Demographics
Characteristics
Opportunity
Alternators
Demographics
Characteristics
Opportunity
Cluster characteristics
Figure 43: Grocery retailing clusters, September 2010
Figure 44: Types of stores where shoppers buy groceries, by grocery retailing clusters, September 2010
Figure 45: Innovations and improvements consumers would like in supermarkets, by grocery retailing clusters, September 2010
Cluster demographics
Figure 46: Grocery retailing clusters, by gender, September 2010
Figure 47: Grocery retailing clusters, by age, September 2010
Figure 48: Grocery retailing clusters, by household income, September 2010
Figure 49: Grocery retailing clusters, by race, September 2010
Figure 50: Grocery retailing clusters, by Hispanic origin, September 2010
Cluster methodology
CUSTOM CONSUMER GROUPS
Key points
Younger men willing to tune into non-supermarket channels
Figure 51: Types of stores where shoppers buy groceries, by gender and age, September 2010
What consumers buy at supermarkets
Figure 52: What consumers buy at supermarkets versus other outlets, by gender and age, September 2010
Reasons consumers choose supermarkets
Figure 53: Reasons for choosing supermarkets, by gender and age, September 2010
APPENDIX—OTHER USEFUL CONSUMER TABLES
Figure 54: Mean weekly spending on groceries in supermarkets and at Walmart, by household income and age, September 2010
Figure 55: Spending on groceries in a typical week, April 2009-June 2010
Figure 56: Grocery outlets shopped at in last four weeks, April 2009-June 2010
Figure 57: Reasons for choosing supermarkets, by race/Hispanic origin, September 2010
Figure 58: Innovations and improvements consumers would like in supermarkets, by race/Hispanic origin, September 2010
Figure 59: Innovations and improvements consumers would like in supermarkets, by gender and age, September 2010
APPENDIX—TRADE ASSOCIATIONS

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