Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The market
- Market factors
- Retailers should regulate themselves before government does
- Channel performance
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- Figure 1: Distribution of expenditures on food for off-premise consumption, by channel, 2012 (est.)
- Figure 2: Distribution of expenditures on food for off-premise consumption, supermarkets versus other,
- Innovation
- Drug stores expand private label offerings
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- Figure 3: Non-supermarket private label product launches, by channel, 2008-12
- The consumer
- Supermarkets are primary food/drink retailer, face competition from mass
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- Figure 4: Food and drink shopping location, November 2012
- Dollar stores, mass, and club stores grow following
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- Figure 5: Change in food and drink shopping behavior, November 2012
- Shoppers under age 45 most willing to shop at a range of outlets
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- Figure 6: Food and drink shopping location, by generation, November 2012
- Low price rises to the top of important attributes
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- Figure 7: Top five important attributes, November 2012
- What we think
Issues in the Market
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- Where are consumers shopping for food and drink?
- How can retailers attract food and drink shoppers?
- How can retailers inspire loyalty in an ever-growing marketplace?
- How can nontraditional retailers grow food and drink sales?
Insights and Opportunities
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- Make it convenient
- Go to them
- Make it fun
- Utilize your assets
- Be different
- Secret savings
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- Figure 8: General attitudes about food and drink shopping, by age, November 2012
- Figure 9: General attitudes about food and drink shopping, by household income, November 2012
- Make it affordable
- Encourage more shopping
- Create new sale seasons
- Make it personal
- Connect with the community
- Put consumers in charge
- Find a niche
Trend Applications
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- Trend: Access All Areas
- Trend: Collective Intelligence
- Future trend: Access Anything Anywhere
Market Drivers
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- Key points
- Consumer confidence up in 2013, but lower income HHs struggle
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- Figure 10: University of Michigan’s index of consumer sentiment (ICS), 2007-12
- Retailers can help consumers navigate rising food costs
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- Figure 11: Changes in USDA Food Price Indexes, 2010 through 2013
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- Figure 12: Grocery shopping expenditures (including non-food and drink items), April 2007-June 2012
- Population trends may further the shift away from supermarkets
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- Figure 13: Population by race and Hispanic origin, 2008, 2013, and 2018
- Retailers should regulate themselves before government does
Channel Performance
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- Key points
- Supermarkets struggle with rise of nontraditional outlets
- Sales by channel
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- Figure 14: Distribution of expenditures on food for off-premise consumption, by channel, 2010 and 2012
Channel Performance—Supermarkets
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- Key points
- Supermarkets challenged, but may be getting a handle on what works
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- Figure 15: Kroger TV ad, “Multiple Sale,” 2013
- Extending range through smaller, concept stores is one means of targeting consumers
- Whole Foods finds success in focus and flexibility
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- Figure 16: Whole Foods TV ad, “Declare Your Independence,” 2012
- Sales of food and drink at supermarkets
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- Figure 17: U.S. supermarket sales and distribution of expenditures on food for off-premise consumption, 2002-12
Channel Performance—Mass/Supercenters and Warehouse Clubs
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- Key points
- Mass merchandisers, supercenters, and warehouse clubs lead growth
- Walmart highlights convenience and quality
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- Figure 18: Walmart TV ad, “Steak-Over,” 2012
- Remind consumer about the availability of food and drink offerings
- Promote a focus on savings
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- Figure 19: BJ’s Wholesale Club TV ad, “The Cook,” 2012
- Sales of food and drink at mass/supercenters and warehouse clubs
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- Figure 20: U.S. mass/supercenters and warehouse clubs sales and distribution of expenditures on food for off-premise consumption, 2002-12
Channel Performance—Convenience Stores/Other Grocery
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- Key points
- Convenience stores/other grocery steadily lose share
- 7-Eleven stands apart from the rest
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- Figure 21: Brands of convenience stores shopped in the last four weeks, April 2011-June 2012
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- Figure 22: 7-Eleven TV ad, “Rites of Flavor,” 2012
- Sales of food and drink at convenience stores/other grocery
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- Figure 23: U.S. convenience stores/other grocery sales and distribution of expenditures on food for off-premise consumption, 2002-12
Channel Performance—Specialty Food Stores
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- Key points
- Specialty gains slight share from 2002-12
- Sales of food and drink at specialty food stores
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- Figure 24: U.S. specialty food store sales and distribution of expenditures on food for off-premise consumption, 2002-12
Channel Performance—Other Stores
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- Key points
- Other stores share unchanged, expanding offerings offer growth
- Drug channel finds success in food
- Walgreens focus on food
- Dollar stores haven’t yet hit stride
- Sales of food and drink at other stores
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- Figure 25: U.S. other store sales and distribution of expenditures on food for off-premise consumption, 2002-12
Innovations and Innovators
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- New product launch trends
- Private label launches grow 11% from 2008-12
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- Figure 26: Private label food and drink launches, by launch type, 2008-12
- Economy and environmentally friendly claims show strongest growth
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- Figure 27: Private label launches, by top 10 claims, 2008-12
- Supermarkets lead private label launches
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- Figure 28: Private label launches, by top 10 companies, 2008-12
- Private label follows general trends, could take greater role in leading
- Health
- Diet
- Organic
- Snack
- For entertaining
- Ethnic
- Trendy
- Bulk
- Single shopper
- Kids
- Grocery tech
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- Figure 29: Attitudes about food and drink shopping technology, by age, November 2012
- Figure 30: Attitudes about food and drink shopping technology, by household income, November 2012
- Safeway’s Just for U loyalty program garners attention as industry game changer
Food and Drink Shopping Location
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- Key points
- Supermarkets are primary food/drink retailers, face competition from mass
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- Figure 31: Food and drink shopping location, November 2012
- Consumers are visiting other retailers, not necessarily with food in mind
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- Figure 32: Supermarkets and food stores, April 2011-June 2012
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- Figure 33: Convenience stores, April 2011-June 2012
- Dollar stores, mass, and club stores grow following
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- Figure 34: Change in food and drink shopping behavior, November 2012
- Men can be lured by convenience, women by low price
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- Figure 35: Food and drink shopping location, by gender, November 2012
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- Figure 36: Attitudes about supermarkets, by gender, November 2012
- Shoppers under age 45 most willing to shop at a range of outlets
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- Figure 37: Food and drink shopping location, by age, November 2012
- Figure 38: Choosing a retailer, by age, November 2012
- High-income HHs more likely to seek quality, still look for low price
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- Figure 39: Food and drink shopping location, by household income, November 2012
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- Figure 40: Attitudes about supermarkets, by household income, November 2012
- Larger HH size means greater range of retail outlets
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- Figure 41: Food and drink shopping location, by household size, November 2012
- Presence of children means greater range of retail outlets
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- Figure 42: Food and drink shopping location, by presence of children in household, November 2012
Nontraditional Food Retailers
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- Key points
- Men open to nontraditional retailers
- Remind consumers that food and drinks are an option for purchase
- Give consumers confidence in products, align with sales mix
- Present affordable options
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- Figure 43: Thoughts on nontraditional food retailers, by gender, November 2012
- Consumers under age 55 most open to nontraditional outlets
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- Figure 44: Thoughts on nontraditional food retailers, by age, November 2012
- Convenience drives interest in range of outlets among HHs with children
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- Figure 45: Thoughts on nontraditional food retailers, by presence of children in household, November 2012
Grocery Shopping Expenditures
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- Key points
- Consumers under the age of 45 spend the most money on groceries
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- Figure 46: Grocery shopping expenditures, by age, April 2011-June 2012
- Grocery spend correlates with HH income
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- Figure 47: Grocery shopping expenditures, by household income, April 2011-June 2012
- Larger HHs spend more on groceries
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- Figure 48: Grocery shopping expenditures, by household size, April 2011-June 2012
- HHs with children spend significantly more on groceries than those without
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- Figure 49: Grocery shopping expenditures, by presence of children in household, April 2011-June 2012
Choosing a Food and Drink Retailer
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- Key points
- Convenience and affordability outweigh health for the average consumer
- Give shoppers what they want
- Don’t be limited by location
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- Figure 50: Attitudes toward shopping for food and drink, by gender, November 2012
- The role of convenience
- Women more amenable to shopping around, could be wooed by promise of one stop
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- Figure 51: Food and drink shopping behavior, by gender, November 2012
- Young shoppers want more from stores, older shoppers want shopping to be easy
- Other services
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- Figure 52: Attitudes toward shopping for food and drink, by age, November 2012
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- Figure 53: Choosing a retailer, by age, November 2012
- Convenience rules for larger households
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- Figure 54: Attitudes toward shopping for food and drink, by household size, November 2012
- Figure 55: Choosing a retailer, by household size, November 2012
- The role of price
- Price is a major driver for food and drink shopping and must be prioritized by all retailers
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- Figure 56: Attitudes toward shopping for food and drink, by age, November 2012
- Lower income-earning households particularly driven by price consciousness
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- Figure 57: Attitudes toward shopping for food and drink, by household income, November 2012
- Larger households look to save where they can, singles should be nurtured
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- Figure 58: Attitudes toward shopping for food and drink, by household size, November 2012
- The role of health and product quality
- Women show a stronger interest in healthful food and drink shopping
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- Figure 59: Attitudes toward shopping for food and drink, by gender, November 2012
- Healthful lifestyle messaging may resonate with older shoppers
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- Figure 60: Attitudes toward shopping for food and drink, by age, November 2012
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- Figure 61: Attitudes toward shopping for food and drink, by age, November 2012
- Higher-income earners over index in an interest in healthful offerings and store quality
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- Figure 62: Attitudes toward shopping for food and drink, by household income, November 2012
- Figure 63: Attitudes toward shopping for food and drink, by household income, November 2012
- Households with children vigilant about making the right choices
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- Figure 64: Attitudes toward shopping for food and drink, by presence of children in household, November 2012
- Figure 65: Attitudes toward shopping for food and drink, by presence of children in household, November 2012
Important Retailer Attributes
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- Key points
- Low price rises to the top of important attributes
- “Local” may appeal to different shoppers in different ways
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- Figure 66: Important attributes, November 2012
- Stores shopped matches interest in claims
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- Figure 67: Important attributes, by food and drink shopping location, November 2012
- Store claims more likely to resonate with women
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- Figure 68: Important attributes, by gender, November 2012
- Retailer claims may help younger shoppers with purchase decisions
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- Figure 69: Important attributes, by age, November 2012
- Low-income HHs prefer low-price guarantee over coupons
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- Figure 70: Important attributes, by household income, November 2012
Impact of Race and Hispanic Origin
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- Key points
- Blacks are drawn to convenience, Asians prioritize cost savings and health
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- Figure 71: Food and drink shopping location, by race/Hispanic origin, November 2012
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- Figure 72: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
- Black shoppers believe stores represent them
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- Figure 73: Choosing a retailer, by race/Hispanic origin, November 2012
- Blacks exhibit lowest spend, Hispanics spend more than non-Hispanics
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- Figure 74: Grocery shopping expenditures, by race/Hispanic origin, April 2011-June 2012
- Hispanic shoppers are more price conscious than are non-Hispanics
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- Figure 75: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
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- Figure 76: Attitudes toward ethnic foods, by race/Hispanic origin, November 2012
- Hispanics are interested in one-stop shopping
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- Figure 77: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
- Quality counts among Hispanic shoppers
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- Figure 78: Attitudes toward shopping for food and drink, by race/Hispanic origin, November 2012
Cluster Analysis
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- Cluster 1: Supermarket Stalwarts
- Demographics
- Characteristics
- Opportunity
- Cluster 2: Bargain Hunters
- Demographics
- Characteristics
- Opportunity
- Cluster 3: New Guards
- Demographics
- Characteristics
- Opportunity
- Cluster characteristic tables
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- Figure 79: Target clusters, November 2012
- Figure 80: Food and drink shopping location, by target clusters, November 2012
- Figure 81: Food and drink shopping location, by target clusters, November 2012
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- Figure 82: I shop for food and drink more at these outlets than I did 12 months ago, by target clusters, November 2012
- Figure 83: I shop for food and drink less at these outlets than I did 12 months ago, by target clusters, November 2012
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- Figure 84: Important attributes, by target clusters, November 2012
- Figure 85: Attitudes and behavior, by target clusters, November 2012
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- Figure 86: Nontraditional food retailers, by target clusters, November 2012
- Figure 87: Attitudes toward shopping for food and drink, by target clusters, November 2012
- Cluster demographic tables
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- Figure 88: Target clusters, by demographic, November 2012
- Cluster methodology
- Convenience:
- Price:
- Health:
- Quality:
Appendix – Other Useful Tables
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- Food and drink shopping location
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- Figure 89: Food and drink shopping location, by gender and age, November 2012
- Figure 90: Food and drink shopping location, by marital/relationship status, November 2012
- Nontraditional food retailers
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- Figure 91: Nontraditional food retailers, by gender and age, November 2012
- Figure 92: Nontraditional food retailers, by household income, November 2012
- Figure 93: Nontraditional food retailers, by marital/relationship status, November 2012
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- Figure 94: Nontraditional food retailers, by household size, November 2012
- Important attributes
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- Figure 95: Important attributes, by gender and age, November 2012
- Figure 96: Important attributes, by marital/relationship status, November 2012
- Attitudes toward food and drink shopping
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- Figure 97: Attitudes toward shopping for food and drink, by gender and age, November 2012
- Figure 98: Attitudes toward shopping for food and drink, by marital/relationship status, November 2012
Appendix – Trade Associations
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