People used to spend as little time as possible on their grocery shopping. Most supermarkets could satisfy whatever nutritional needs a typical family had. But that get-it-all-done-in-one-stop experience may no longer be as important as it once was. Although their daily lives remain as busy as ever, if not more so, today’s consumers increasingly diversify their food sources.
A new study by the Food Marketing Institute (FMI), an advocacy group for the food retail industry, found that for a growing part of the population, the “primary store” now gives way to any number of smaller specialty places. Also, in many households there is no longer a “primary shopper,” meaning that more than one person makes shopping decisions.
“The grocery industry in the U.S. is undergoing some of the most dramatic changes since supermarkets emerged in the 1940s,” says Hayley Peterson, a retail reporter for Business Insider. “Whereas a single store once served all of shoppers’ food and beverage needs, consumers are now buying groceries across more than a dozen retail channels.”
Why the changes? Obviously, spreading out one’s shopping list over several outlets is less convenient and more time-consuming. To be sure, surveys find that the vast majority of food shoppers still go to traditional supermarkets and supercenters for staples, but they can’t always find the precise mix of value, quality, and private label brands they are looking for, according to market researchers, says Peterson. Especially private label groceries are rapidly gaining in popularity and are projected to grow by over 60 percent to $133 billion in annual sales by 2016, up from $83 billion in 2008.
Private labels can be cheaper, although not reliably, compared to their national brand counterparts, but price is not the only reason for their greater acceptance. Most consumers believe – justifiably or not – that smaller labels offer higher quality and better value, according to one report.
But it’s freshness that is the main driver for consumers in deciding where to shop, says Peterson. People who are suspicious of processed and genetically modified foods and want to know where their food comes from will seek out outlets that make them feel safe with their choices. For this, they are not only willing to pay higher prices, they also go (or drive) the extra mile to get what they want.
“It’s no secret that health and wellness have become key drivers of today’s food culture,” says Maggie Hennessy, a senior correspondent for FoodNavigator-USA in Chicago. “For a growing number of consumers, health is equated with less processed. Indeed, many have become savvy readers of product labels, avoiding foods that contain preservatives, chemicals, long or unpronounceable ingredient lists and artificial sounding ingredients.”
As they face these shifts in consumer demands, food manufacturers and retailers of all sizes would do well to take these trends seriously and respond accordingly.
“By increasing selection of and calling attention to locally sourced products, retailers can leverage the value of fresh foods and quality products to build trust and demonstrate that they understand and match up with consumer values,” Hennessy advises.