Table of Contents
Executive Summary
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- The issues
- Grocery to surpass $700 billion within next five years
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- Figure 1: Total US MULO sales and fan chart forecast of groceries, at current prices, 2010-20
- Supermarkets struggling to stay relevant
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- Figure 2: Retailers shopped for groceries, August 2015
- Online grocery shopping poised to take off
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- Figure 3: Select attitudes toward shopping for groceries online, November 2013 and August 2015
- The opportunities
- Think small
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- Figure 4: Reasons for choosing primary grocery retailer, August 2015
- Go digital
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- Figure 5: Grocery shopping behaviors and desired improvements in technology, by age, August 2015
- Leverage emotion to enhance in-store experience
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- Figure 6: Desired innovations or improvements related to experience when grocery shopping, By gender, August 2015
- What it means
The Market – What You Need to Know
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- Forecast positive for grocery market
- Supermarkets versus “all other”
- Changing consumer preferences and needs require grocers to be nimble
Market Size and Forecast
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- MULO grocery sales expected to rise steadily
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- Figure 7: Total US MULO sales and fan chart forecast of groceries, at current prices, 2010-20
- Figure 8: Total US MULO sales and forecast of groceries, at current prices, 2010-20
Market Breakdown
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- Other MULO sales surpass supermarkets
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- Figure 9: Total US MULO sales and forecast of groceries, by retail channel, at current prices, 2010-20
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- Figure 10: Market share of total US MULO sales and forecast of groceries, by retail channel, at current prices, 2013, 2015, and 2020
- Food and drink account for two thirds of sales
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- Figure 11: Total US MULO sales of groceries, by category, at current prices, 2010-20
- Figure 12: Total US MULO category market share of groceries, by segment, at current prices, 2015 (est)
Market Factors
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- Palettes expand as US population diversifies
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- Figure 13: Population aged 18 or older, by race and Hispanic origin, 2010-20
- Figure 14: Foreign-born consumers in the US, by country/region of origin, 2012
- Grocers cater to those with special diets and shifting attitudes towards being healthier
- Organic and natural claims maintain wide appeal; premium pricing may be met with increasing resistance
- Local movement creates need for transparency and authenticity
- Increased fragmentation leads to mergers and acquisitions
Key Players – What You Need to Know
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- Retailers are wading their way through current waters
- Beyond the sole grocery store
- It’s a digital world after all
What’s Working?
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- Sales of Leading Grocery Retailers and Wholesalers
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- Figure 15: Top retailers, January 2015
- Profiles of leading retailers
What’s Struggling?
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- Supermarkets taking a hit from other MULO
- Many barriers to online grocery shopping adoption
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- Figure 16: Limitations to food/drink shopping online, March 2015
What’s Next?
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- “It’s not a question of if, it’s a question of when”
- Smart technology
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- Figure 17: Grocery shopping behaviors and desired improvements related to technology, by age, August 2015
- Prepared meals, meal kits, and other subscription services
- Online grocery shopping and pickup services
The Consumer – What You Need to Know
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- Supermarkets and Walmart top grocers shopped, but for how long?
- Location, location, location
- Online grocery shopping still low, but growing
- Innovating around experience
Who is the Primary Grocery Shopper?
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- Figure 18: Primary grocery shopper profile, by key demographics, August 2015
- Many consumers find grocery shopping enjoyable
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- Figure 19: Profile of grocery enthusiasts, by key demographics, August 2015
- In their words
- I enjoy grocery shopping
- Grocery shopping is not my favorite activity
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Retailers Shopped
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- It’s a journey, not a destination
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- Figure 20: Retailers shopped for groceries, August 2015
- Supermarkets not getting fair share of younger consumers
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- Figure 21: Retailers shopped for groceries, by gender and age, August 2015
- Retailers must continue innovating to maintain or grow share
- In their words
Reasons for Choosing Primary Grocery Retailer
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- Loyal to a location, not a brand
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- Figure 22: Reasons for choosing primary grocery retailer, August 2015
- Small store formats help address the proximity issue
- Employees can take on more of an expert/consultant role
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- Figure 23: Reasons for choosing primary grocery retailer, by generations, August 2015
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- Figure 24: Reasons for choosing primary grocery retailer, by Hispanic origin, August 2015
- Do loyalty cards drive loyalty?
- Important role
- Not much influence
Changes in Grocery Spending
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- Consumers spend on average about $110 per week on groceries
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- Figure 25: Average grocery expenditures per week, April 2014-June 2015
- Nearly half of shoppers are spending more online
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- Figure 26: Changes in grocery spending, by retailer type, August 2015
- Why the changes?
Attitudes toward Online Grocery Shopping
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- High interest, slow adoption
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- Figure 27: Select attitudes toward shopping for groceries online, November 2013 and August 2015
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- Figure 28: Select attitudes toward shopping for groceries online, by select demographics, August 2015
- High usage and interest in click-and-collect services
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- Figure 29: Attitudes toward using in-store pickup services for items purchased online, August 2015
- In their words
- Open-minded
- Not interested
Grocery Shopping Behavior
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- Planned versus impromptu
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- Figure 30: Grocery shopping behavior, August 2015
- Preparation stage focused on finding the right price(s)
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- Figure 31: Grocery shopping behavior, by generations, August 2015
- Coupons discovered in-store are gaining ground
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- Figure 32: Shopper attitudes around coupons, January 2014
The Grocery Shopping Process Revealed
Desired Innovations and/or Improvements
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- Grocery shopping offers rich emotional territory to tap into
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- Figure 33: Desired innovations or improvements when grocery shopping, August 2015
- CHAID analysis
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- Figure 34: Desired innovations or improvements when grocery shopping – CHAID – Tree output, August 2015
- How to drive brand preference and engagement: in their words
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Total MULO sales of groceries
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- Figure 35: Total US MULO sales and forecast of groceries, at inflation-adjusted prices, 2010-20
- Supermarket sales
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- Figure 36: Total US supermarket sales of groceries, at inflation-adjusted prices, 2010-20
- Figure 37: Total US supermarket sales of groceries, by category, at current prices, 2010-20
- Other MULO sales
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- Figure 38: Total US sales of groceries through other MULO retailers*, at inflation-adjusted prices, 2010-20
- Figure 39: Total US sales of groceries through other MULO retailers*, by category, 2010-20
- Additional data
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- Figure 40: Distribution of expenditures for food for off-premise consumption, 1995-2015
- Figure 41: Household size, by race and Hispanic origin, 2012
- Figure 42: Percentage of people aged 20 or older who are obese, by gender, 2001-04 to 2009-12
Appendix – The Consumer
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- CHAID methodology
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- Figure 43: Desired innovations or improvements when grocery shopping – CHAID – Table output, August 2015
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- Figure 44: General attitudes/opinions toward shopping, food, nutrition, April 2014-June 2015
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- Figure 45: Average grocery expenditures per week, 2011-15, April 2014-June 2015
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- Figure 46: Number of times shopped at any supermarket in last four weeks, April 2014-June 2015
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- Figure 47: Influence of advertising when shopping, always refer to, April 2014-June 2015
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- Figure 48: Regular coupon use by method, January 2015
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