Four factors influencing grocery retailing

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By Rita Jane Gabbett on 11/7/2017

WASHINGTON D.C. — Four macro-economic factors influencing the U.S. grocery retailing landscape include population changes, price sensitivity, job growth and urbanization, Diana Sheehan, director of Kantor Retail, told attendees at the National Chicken Council’s annual meeting here last week.

She also told the group that while Amazon was the catalyst for the growing trend toward online grocery shopping, that company is not the driver — Walmart and Kroger are leading that trend.

She called e-commerce “the new pharmacy” in that it now accounts for 11 percent of the grocery market. While about 10 percent of U.S. grocery stores currently have “click and collect” offers, she predicted that in the next three to five years, that will grow to 90 percent, saying that rural markets in particular will thrive on this feature.

While shoppers are finding their groceries in more channels, she said supermarkets are still the No. 1 channel. Just because 40 percent of shoppers have access to 70 percent of the wealth, she warned that those shoppers still like to save money.

Discount grocer Aldi is the third-largest seller of food products, behind Walmart, then Kroger. After those three, in order, are: Costco, Albertsons, Publix, H-E-B, Lidl (based on projections), Amazon/Whole Foods and Ahold Delhaize.

Meal kits

She noted that Aldi’s low-cost meal kits are selling so fast they are having a hard time keeping them on the shelf. She predicted subscription services might actually go away over time, saying that retailers are better prepared to make the idea work and rather than buying meal kit delivery services, more retailers are just taking the concept and doing it on their own.

In answer to a question, she suggested there is an opportunity for suppliers to partner with their retail customers on meal kit solutions.

Young shoppers vs. old

While all grocery shoppers want the basics, those “nice to haves” differ by age, explained Sheehan. While millennials migrate toward natural and organic, as well as fresh prepared foods, baby boomers still shop in the center of the store and are more interested in the shopping experience in terms of clean, attractive store, friendly associates.

For today’s shoppers in general, experience is more important than in the past. Automation is also important. Reconnecting with shoppers is also key, such as butchers who talk to consumers and give advice.

As an example, she pointed to a recent deal between grocery chain Hy-Vee and burger chain Wahlburgers to create a complex that will include a restaurant, a workout gym and a grocery store all together.

Another trend for suppliers is private label fresh meat products. She said shoppers trust their retailer to give them what is fresh and wholesome, noting the Jewel’s private label spinach feta sausage is selling quite well.