Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Food deflation has dampened sales but brighter outlook expected
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- Figure 1: MULO sales and fan chart forecast of groceries, at current prices, 2012-22
- Online marketplace has yet to take off
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- Figure 2: General online shopping behavior, August 2017
- Price wars contribute to channel-shifting
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- Figure 3: Purchase incidence by channel – Shopping the same or more, August 2017
- The opportunities
- Play up freshness
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- Figure 4: Select items shopped at supermarkets/discount grocers*, August 2017
- Invest in e-commerce
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- Figure 5: Buy online and pick up at store behavior, August 2017
- Add a personal touch
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- Figure 6: Desired improvements, by generation, August 2017
- What it means
The Market – What You Need to Know
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- Food deflation impedes sales
- Supermarkets have more work to do
- Away from home food consumption could threaten grocers’ sales
- It’s not all food and drinks
- Americans endeavor to lead healthier lifestyles
Market Size and Forecast
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- MULO sales escalate in spite of falling food costs
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- Figure 7: MULO sales and fan chart forecast of groceries, at current prices, 2012-22
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- Figure 8: MULO sales and forecast of groceries, at current prices, 2012-22
Market Breakdown
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- Gap widens between supermarkets and “all others”
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- Figure 9: MULO sales and forecast of groceries, by segment, at current prices, 2012-22
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- Figure 10: Percentage of total MULO grocery sales, by segment, at current prices, 2012-22
- Grocery more than food and drink
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- Figure 11: MULO sales of groceries, by category, at current prices, 2011-21
- Supermarkets not getting fair share of household goods and HBC
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- Figure 12: Percentage of MULO sales of groceries, by category and segment, at current prices, 2017
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- Figure 13: Total MULO percentage of sales of groceries, by category, by segment, at current prices, 2017
Market Perspective
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- Food at home on top for now
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- Figure 14: Share of food expenditures for food at home and food away from home, 2007-17
- Meal kits: opportunity or new competitive channel?
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- Figure 15: Attitudes toward meal kits, by generation, August 2017
- In their words
- Key players and efforts at retail
Market Factors
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- Nearly three quarters of Millennials solely responsible for grocery shopping
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- Figure 16: US population by generation, 2017
- Increasing diversity influencing American palette
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- Figure 17: Purchase incidence by channel – Shopping more, by race and Hispanic origin, August 2017
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- Figure 18: Purchase location, by race and Hispanic origin, December 2016
- Food deflation continues
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- Figure 19: Changes in at home food price indexes, 2016-18
- Already fierce competitive landscape sees even more entrants
- Americans’ attempts to eat healthier impact retailer choices
- The acquisition that rocked the grocery world
Key Players – What You Need to Know
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- Top five grocers garner over a half billion in sales
- Foodservice in grocery retail becomes commonplace
- Big guys are pressuring the little guys
- Amazon implements immediate change with newly acquired Whole Foods
- Lidl and Aldi set to expand
Company Sales of Grocery Retailers
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- No major changes among the top 10
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- Figure 20: Top US grocery retailers, 2017
What’s Trending?
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- Supermarkets beef up foodservice programs
- Hy-Vee
- Mariano’s
- Wegman’s
- Kroger
- Grocery bars a new opportunity for alcohol brands
- Private label not so private
- In their words: private label brands
What’s Struggling?
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- Small, independent grocers need to find their niche
What’s Next?
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- Amazon bought Whole Foods; Now what?
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- Figure 21: Amazon Locker at Whole Foods Market, Chicago, September 2017
- Consumer reaction
- What’s going on with Lidl and Aldi?
- Voice-controlled orders are the future
The Consumer – What You Need to Know
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- Many consumers like to grocery shop
- Men share the responsibility
- Value chains see gains
- Online shopping still lags
- Supermarkets evolve to become more lifestyle-oriented
Grocery Shopper Profile
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- Two thirds of consumers do all the shopping
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- Figure 22: Grocery shopping responsibility, August 2017
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- Figure 23: Grocery shopping responsibility, by key demographics, August 2017
- Men play a big role
- Millennials take on more responsibility
- Enjoyment for grocery shopping leads consumers into stores
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- Figure 24: Grocery shopping enjoyment, by gender and age and race and Hispanic origin, August 2017
Purchase Incidence by Channel
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- Value-oriented stores and Amazon attract more shoppers
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- Figure 25: Purchase incidence by channel – Any shopping, August 2017
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- Figure 26: Purchase incidence by channel, August 2017
- Lower income consumers going outside traditional grocery stores in search of better prices
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- Figure 27: Purchase incidence by channel – Shopping more, by age and income, August 2017
- Majority of Blacks and Hispanics shopping more at value-oriented stores
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- Figure 28: Purchase incidence by channel – Shopping more, by race and Hispanic origin, August 2017
- In their words: where they shop
Channels Shopped by Item
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- Nearly three in 10 shoppers go to at least three stores
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- Figure 29: Number of stores shopped, August 2017
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- Figure 30: Three or more stores shopped, by generation and Hispanic generation, August 2017
- In their words: why they shop around
- Supermarkets have an opportunity to redefine fresh
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- Figure 31: Correspondence analysis – Channels shopped by item, August 2017
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- Figure 32: Channels shopped by item, August 2017
Online Shopping Attitudes and Behaviors
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- One third of adults have purchased groceries online
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- Figure 33: General online shopping behavior, August 2017
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- Figure 34: Online buyer profile, by key demographics, August 2017
- Why aren’t more people buying groceries online?
- What are retailers doing to build e-commerce?
- Click and collect a big hit
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- Figure 35: Buy online and pick up at store behavior, August 2017
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- Figure 36: Buy online and pick up at store behavior, by parental status, August 2017
- Delivery continues to evolve
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- Figure 37: Willingness to pay for grocery delivery services, by gender and age and household income, August 2017
- In their words: thoughts on ordering groceries online
Spending and Shopping Frequency
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- Spending
- Average weekly grocery spending hovers at $108
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- Figure 38: Average grocery expenditures per week, April 2016-May 2017
- In their words
- Frequency
- Supermarkets draw the most weekly shoppers
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- Figure 39: Shopping frequency per channel, August 2017
Grocery Shopping Process
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- Pre-planning
- One quarter of shoppers use tools to plan shopping trips
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- Figure 40: Food and drink shopping technology usage and awareness – Currently using, by generation, August 2016
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- Figure 41: Top sources of coupons, ever used, April 2016-May 2017
- In their words
- In-store shopping
- Stuck in a routine
- In their words
Desired Improvements
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- More than just a place to shop
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- Figure 42: Foodservice concept interest, August 2017
- In their words: experiential retailing
- Millennials interested in ways to save time
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- Figure 43: Desired improvements, by generation, August 2017
- TURF analysis reveals many opportunities to maximize reach
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- Figure 44: TURF analysis – Desired improvements, August 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Correspondence analysis methodology
- TURF methodology
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 45: MULO sales and forecast of groceries, at inflation-adjusted prices, 2012-22
- Figure 46: MULO sales and fan chart forecast of supermarkets, at current prices, 2012-22
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- Figure 47: MULO sales and fan chart forecast of other MULO, at current prices, 2012-22
- Figure 48: MULO sales of groceries, by segment, at current prices, 2015 and 2017
- Figure 49: Supermarket sales of groceries, at current prices, 2012-17
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- Figure 50: Supermarket sales of groceries, at inflation-adjusted prices, 2012-17
- Figure 51: Sales of groceries through other MULO retailers*, at current prices, 2012-22
- Figure 52: Sales of groceries through other MULO retailers*, at inflation-adjusted prices, 2012-22
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- Figure 53: Supermarket sales of groceries, by category, at current prices, 2012-17
- Figure 54: Sales of groceries through other MULO retailers*, by category, 2012-17
- Figure 55: MULO sales of food and drink, by retail channel, 2012-17
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- Figure 56: MULO sales of household goods, by retail channel, 2012-17
- Figure 57: MULO sales of HBC products, by retail channel, 2012-17
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- Figure 58: Population by race and Hispanic origin, 2012-22
- Figure 59: Distribution of generations by race and Hispanic origin, 2017
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- Figure 60: Distribution of expenditures for food for off-premise consumption, by retail channel, 1996-2016
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Appendix – The Consumer
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- Figure 61: Choosing a non-supermarket location, March 2015
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- Figure 62: Categories purchased at supermarkets/discount grocers, August 2017
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- Figure 63: Categories purchased at mass merchandisers, August 2017
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- Figure 64: Categories purchased at drug stores, August 2017
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- Figure 65: Categories purchased at online-only retailers, August 2017
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- Figure 66: Categories purchased at warehouse clubs, August 2017
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- Figure 67: Categories purchased at organic/natural grocers, August 2017
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- Figure 68: Number of times shopped at any supermarket in last four weeks, April 2016-May 2017
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- Figure 69: Where coupons are redeemed, April 2016-May 2017
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- Figure 70: Sources of coupons, ever use, April 2016-May 2017
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- Figure 71: Types of coupons used, April 2016-May 2017
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- Figure 72: Supermarkets/food stores shopped in past four weeks, April 2016-May 2017
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- Figure 73: Shopping – Any reference, by generation, Winter 2017
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- Figure 74: Table – TURF analysis – Desired improvements, August 2017
- Additional qualitative responses
- Meal kits
- Private label brands
- Where consumers shop
- Grocery budgeting
- Pre-planning process
- In-store shopping process
- Experiential retailing
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