Table of Contents
Executive Summary
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- Overview
- The issues
- Sales inch slightly up as food costs rise
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- Figure 1: US multi-outlet sales and fan chart forecast of groceries, at current prices, 2013-23
- Strong preference for in-store shopping
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- Figure 2: Shopping methods, by generation, April 2018
- “Slow leak” at traditional supermarkets
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- Figure 3: Purchase incidence by channel – Shopping more, April 2018
- Loyal to location and low prices
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- Figure 4: Shopping preferences, April 2018
- The opportunities
- Make natural and organic foods more accessible
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- Figure 5: Purchase incidence at natural/organic grocers, April 2018
- Constantly refine what convenience means
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- Figure 6: Desired improvements, April 2018
- Lean into experiential retailing
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- Figure 7: Attitudes toward store experiences, by gender and age, April 2018
- What it means
The Market – What You Need to Know
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- Sales back on track as food prices rise
- Traditional grocers need to capture more non-food sales
- Share of food away from home inches up
- Millennials assume more grocery responsibility
- Increased attention on health means heightened awareness of manufacturers’ claims, ingredients, and processes
Market Size and Forecast
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- Steady growth on the horizon
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- Figure 8: US multi-outlet sales and fan chart forecast of groceries, at current prices, 2013-23
- Figure 9: Multi-outlet sales and forecast of groceries, at current prices, 2013-23
Market Breakdown
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- Breakdown by channel
- Sales relatively split between supermarkets and “all others”
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- Figure 10: Multi-outlet sales and forecast of groceries, by channel, at current prices, 2013-23
- Figure 11: Percentage of total multi-outlet sales of groceries, by channel, at current prices, 2013-23
- Breakdown by product category
- Food and drink remain dominant type of “groceries” purchased
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- Figure 12: Multi-outlet sales of groceries, by category, at current prices, 2013-18
- Breakdown by product category and channel
- Supermarkets’ non-food share is minimal and shrinking
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- Figure 13: Percentage of MULO sales of food and drink versus non food and drink, by channel, at current prices, 2018
- Figure 14: Total MULO percentage of sales of groceries, by channel, by category, at current prices, 2018
Market Perspective
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- Share of food away from home inches up
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- Figure 15: Share of food expenditures for food at home and food away from home, 2008-18
Market Factors
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- Millennials most likely to assume sole grocery shopping responsibility
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- Figure 16: Grocery shopping responsibility, by generation, April 2018
- Increasing diversity influences food and drink preferences
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- Figure 17: Purchase incidence by channel, by race and Hispanic origin, April 2018
- Americans are trying to eat healthier
- Food prices creep back up
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- Figure 18: Changes in at-home food price indexes, 2016-18
Key Players – What You Need to Know
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- When it comes to grocery, Walmart is untouchable
- Meal kit expansion could drive sector growth
- It’s all about Prime at Amazon and now, Whole Foods
- Lidl slows down US expansion plans
- More consolidation on the horizon?
- Grocers getting more tech savvy
Company Sales of Grocery Retailers
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- Welcome Amazon to the Top 20
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- Figure 19: Top US grocery retailers, 2018
What’s Trending?
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- Meal kit suppliers seek brick and mortar partners
- In their words: meal kits
- Amazon and Whole Foods: A year later
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- Figure 20: Whole Foods E-mail, February 2018
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- Figure 21: Amazon E-mail, February 2018
- In their words: the Amazon and Whole Foods effect
- Grocery stores sought out to anchor shopping centers
- Foodservice in grocery retail gets bigger
What’s Struggling?
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- Lidl’s US debut off to a slow start
- Price wars in recent years may have led to some bankruptcies and sales declines
What’s Next?
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- Landscape ripe for more mergers and acquisitions
- Tech becoming more of a priority
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- Figure 22: The Kroger Co., Scan, Bag, Go E-mail, June 2018
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- Figure 23: Attitudes toward voice command technology, by key demographics, April 2018
- Brick and mortar retailers test new store formats
- In their words: the future of grocery
The Consumer – What You Need to Know
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- Most shoppers are making weekly trips
- Online shopping still lags behind
- Value-oriented stores outperforming others
- Loyal to location and price
- Experiential retailing efforts may be paying off
Grocery Shopper Demographic Profile
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- For the most part, grocery shopping is a one-person job
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- Figure 24: Grocery shopping responsibility, April 2018
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- Figure 25: Grocery shopping responsibility, by key demographics, April 2018
- Traditional gender roles continue to change
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- Figure 26: Percentage of men who share the grocery shopping responsibility, August 2016-April 2018
Grocery Shopper Segmentation
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- Using data to dimensionalize shoppers’ needs and motivations enables more finite targeting
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- Figure 27: Grocery shopper segments, April 2018
- Engaged Experimenters (39%)
- Characteristics
- Opportunities and Risks
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- Figure 28: Demographic profile of Engaged Experimenters, April 2018
- Routine Shoppers (32%)
- Characteristics
- Opportunities and Risks
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- Figure 29: Demographic profile of Routine Shoppers, April 2018
- On Demand Pragmatists (29%)
- Characteristics
- Opportunities and Risks
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- Figure 30: Demographic profile of On Demand Pragmatists, April 2018
Spending and Shopping Frequency
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- Average weekly spending hovers above $100
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- Figure 31: Average grocery expenditures per week, January 2017-March 2018
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- Figure 32: Average grocery expenditures per week, by household income, January 2017-March 2018
- 80% shop at least weekly
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- Figure 33: Frequency of shopping, April 2018
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- Figure 34: Average number of times shopped in past four weeks, by top 10 shopped supermarkets/food stores, January 2017-March 2018
- Quick fill-in trips on the rise
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- Figure 35: Heavy shopping* frequency, by fill-in versus stock-up preferences, by key demographics, April 2018
Shopping Method
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- Nearly all shopping done in-store, but online continues to grow
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- Figure 36: Shopping methods, April 2018
- Retailers should focus on multi-channel shoppers
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- Figure 37: Shopping methods, by nets, April 2018
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- Figure 38: Single versus multi-channel shoppers, by generation, April 2018
- High consumer interest in shopping online in the future
Purchase Incidence by Channel
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- Online-only retailers, farmers’ markets, and natural/organic stores see slightly more shoppers
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- Figure 39: Purchase incidence by channel – Any shopping, April 2018
- Shopping patterns remain rather status quo with value-oriented stores on top
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- Figure 40: Purchase incidence by channel, April 2018
- Thoughts on discount grocers
- Thoughts on dollar stores
- Thoughts on organic/natural grocers
Channels Shopped by Item
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- Consumers continue to compartmentalize their shopping needs
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- Figure 41: Channels shopped by item, April 2018
Shopping Process
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- How consumers feel about the process
- Grocery shopping is enjoyable to most
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- Figure 42: Grocery shopping enjoyment, April 2018
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- Figure 43: Grocery shopping enjoyment, by gender and age, April 2018
- In their words
- What consumers do before or while shopping
- Path to purchase is longer for multi-channel shoppers
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- Figure 44: Shopping process, April 2018
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- Figure 45: Shopping process among in-store shoppers, by age, by gender, April 2018
- The role of coupons
- Paper coupons still have their place in a digital world
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- Figure 46: Sources of coupons, ever used, January 2017-March 2018
- How consumers learn about new products
- Social media should be on the radar
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- Figure 47: Channels for online food/drink discovery, February 2018
- How consumers shop once in the store
- Fill-in and stock-up food and beverage shoppers both visit most aisles
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- Figure 48: Food/drink section shopped, by quick fill-in versus stock-up preferences, April 2018
Influencers
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- Purchasing decisions extend well beyond the primary purchaser
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- Figure 49: Influence of others, April 2018
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- Figure 50: Influence of others, by grocery shopping responsibility, April 2018
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- Figure 51: Influence of others, by number of children of any age in household, April 2018
- Websites, social media, and recommendations influence product discovery
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- Figure 52: Method of learning about the last new food and drink bought online, February 2018
- Packaging and label communication also influence product choices
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- Figure 53: Label communication, April 2018
Loyalty in Grocery
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- On average, shoppers visit at least two stores, which means less loyalty to any given store
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- Figure 54: Number of stores shopped, April 2018
- In their words: why they shop at multiple stores
- Loyalty to location
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- Figure 55: Loyalty to store location, by key demographics, April 2018
- In their words: grocery store loyalty
- Loyalty to savings
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- Figure 56: Loyalty to price versus brands, by key demographics, April 2018
- In their words: brand loyalty
- How can brands get past the price barrier?
Attitudes toward Private Label
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- Six in 10 shoppers think store brand quality equates to national brands
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- Figure 57: Attitudes toward store brands versus name brands, by select demographics, April 2018
- Room to grow private label online
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- Figure 58: Where store brands are purchased, by age, April 2018
- In their words
Improving the Shopping Experience
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- Experiential retailing is paying off
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- Figure 59: Attitudes toward store experiences, by generation, April 2018
- In their words: thoughts on in-store experiences
- Foodservice plays a key role in creating experiences
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- Figure 60: Attitudes toward stores as destinations, by gender and age, April 2018
- In their words: thoughts on in-store foodservice
- Customized offers, samples, and fast checkout are top desired improvements
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- Figure 61: Desired improvements, April 2018
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- Figure 62: TURF analysis – Desired improvements, April 2018
- In their words: the “one” thing grocers could do better
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- TURF methodology
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 63: Multi-outlet sales and forecast of groceries, at inflation-adjusted prices, 2013-23
- Figure 64: Supermarket sales and forecast of groceries, at inflation-adjusted prices, 2013-23
- Figure 65: Sales and forecast of groceries through other multi-outlet channels, at inflation-adjusted prices, 2013-23
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- Figure 66: Multi-outlet sales of groceries, by channel, at current prices, 2016 and 2018
- Figure 67: Supermarket sales of groceries, by category, at current prices, 2013-18
- Figure 68: Sales of groceries through other multi-outlet channels, by category, at current prices, 2013-18
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- Figure 69: Multi-outlet sales of food and drink, by retail channel, at current prices, 2013-18
- Figure 70: Multi-outlet sales of general merchandise, by retail channel, at current prices, 2013-18
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- Figure 71: Multi-outlet sales of HBC, by retail channel, at current prices, 2013-18
- Figure 72: Population by race and Hispanic origin, 2013-23
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- Figure 73: Generations, by race and Hispanic origin, 2018
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Appendix – Key Players
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- Figure 74: Top US grocery retailers, brands/concepts included, 2018
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Appendix – The Consumer
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- Figure 75: Supermarkets/food stores shopped in the past four weeks, January 2017-March 2018
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- Figure 76: Number of times shopped at any supermarket/food store in past four weeks, January 2017-March 2018
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- Figure 77: Coupon usage, January 2013-March 2018
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- Figure 78: Types of coupons used, January 2017-March 2018
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- Figure 79: Where coupons are redeemed, January 2017-March 2018
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- Figure 80: Table – TURF analysis – Desired improvements, April 2018
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