This is Not Your Grandmother’s Grocery Store
February 16, 2019
When Piggly Wiggly opened in 1916 in Memphis, Tennessee, it was a time-saving marvel, allowing customers to select all of their items and then pay for them together at the front of the store. Imagine that! Well, it may seem obvious now, but it was the first of a long line of retail innovations designed to meet consumers’ changing needs. If your 1920’s great-grandmother were able to suddenly walk into a modern supermarket, she’d probably recognize the traditional departments such as meat, produce, and bakery. But what would she make of the pharmacy, the health clinic, the demonstration kitchen, the optometrist? Not to mention the wood-fired pizza stand and the kombucha bar. If she were perceptive, she’d probably conclude that the grocery environment had changed because it reflected the different lifestyles and demands of her descendants.
Societal trends drive retail trends. Profit margins on grocery items are thin and retailers must do whatever they can to court and retain satisfied customers.
Here are some of the societal trends that are shaping the modern supermarket.
People are living longer, but they’re doing so in a world where obesity has more than doubled since 1980 (Deloitte, 2018). Chronic diseases are rampant. According to Johns Hopkins, about 78 million adults in the US are dealing with high blood pressure, another 20 million are managing diabetes, and 15 million have coronary artery disease. Cardiovascular disease alone causes 1 in 3 deaths. Each of these diseases and many more have widely known dietary connections, and governmental and public health campaigns have stressed eating right as a way to prevent and manage disease. All of this is taking place in an environment where the cost of healthcare is outpacing growth by 2%, making prevention programs and healthy lifestyles even more attractive options (Deloitte, 2018).
It’s no surprise, then, that 70% of shoppers now say they’re making an effort to eat healthy (Mintel, 2018).
A parallel trend focuses on environmental and social health. In addition to traditional requests for price, taste,and convenience, shoppers also now say they care about what’s in their food, where it comes from, and how their food choices impact the world (Deloitte, 2018). Sixty-six percent of respondents told Nielsen in 2015 that they are willing to pay more for sustainable goods.
Demand for companies to address personal and global wellness is so strong that the Consumer Goods Forum launched a Health and Wellness Pillar through which their 400 product manufacturers and retailers regularly measure themselves against benchmarks that include “leveraging the store environment and digital platforms to drive healthier dietary and lifestyle behaviors” and engaging in transparent product labeling and responsible marketing. Many of these members are supermarkets creating health and wellness programming designed and managed, in part, by retail dietitians.
Another trend with a big impact is the desire for a retail experience (Mintel, 2018). As more digitally native millennials become heads of household and the population as a whole is more reliant on digital channels, shoppers look for compelling reasons to go into physical stores. One large survey found that between their 2017 and 2018 measures, the likelihood of a consumer choosing to shop at a supermarket that offers an “experience” more than doubled. Men more than women expressed this preference, young men in particular (62% of men between 15 and 34). Importantly, these “experiences” can include classes, demonstrations and another health programming. Consumers want something engaging, helpful and face-to-face — an encounter that they can’t get from an app (Mintel, 2018).
The Food Marketing Institute stresses that these trends provide opportunities for grocers to “guide and inform shoppers” about healthy eating (2017). They suggest that stores help meet the demand for information that goes beyond what’s in an item to address the bigger picture. This can include clarifying how specific products and ingredients fit into a healthy diet, providing deeper explanations for murky subjects like GMOs, and being transparent with issues of ethical practices.
FMI also surveyed 38 retailers to get a picture of US supermarket health and wellness offerings. Their extensive findings revealed substantial growth in health and wellness programs. 89% of participants had established programs in 2017, as compared to 54% in 2014. 81% felt that such programs were profitable and attracted and retained customers (Steinbach, 2017).
What did these programs include? First, many focused on total store participation and were usually managed by teams of experts. More than 90% of stores employed a retail RD at some level from corporate to on-site. The vast majority tried to cater to shoppers who were well in addition to those managing illnesses, making their programs as inclusive as possible. More than 50% said their banner locations had “product sampling, healthy recipes, good-for-you products, digital apps, and health screenings.” Participants also reported having “store tours, wellness, and weight management programs, cooking demonstrations and classes, and nutrition counseling” (Steinbach, 2017).
Critically, although most felt their programs were good investments, they were also challenged to set up clear measures of ROI. This is a topic I will dig into much deeper in an upcoming post because measures that demonstrate effectiveness are not all that hard to set up and track and their results are pure gold for securing and guiding future programming.
If I had to give a brash summary, I’d say it like this: today’s shoppers are often sick, confused, struggling with their weight, digitally distracted, and living under the burden of crushing health care costs. But they are also curious, motivated by ethical concerns, willing to engage with transparent retailers, open to change and new experiences, and happy to reward retailers who meet their needs with their dollars and their loyalty.
In the July 2016 issue of Today’s Dietitian, I wrote an article entitled, “Evolution of the Grocery Industry and the Supermarket RD,” that may also be helpful to read.
Contact me and I’ll help you get to the heart of today’s consumer.
Deloitte. (2018). Health & Wellness Progress Report. LINK
Food Marketing Institute. (2017). U.S. Grocery Shopper Trends 2017. LINK
Mintel. (2018). Grocery Retailing – US – July 2018. LINK
The Food Marketing Institute (2017). The 2017 Report on Retailer Contributions to Health & Wellness: What Dietitians Need to Know. LINK
Changemaker Barbara Ruhs, MS, RDN, is transforming public health by re-envisioning the way food is understood and promoted. A seasoned supermarket dietitian and former Harvard nutritionist, Barb leads the way by offering innovative retail solutions that forge connections between food marketers, market RDs and consumers hungry for truth.
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