Non-traditional grocery formats, including wholesale clubs and supercenters, have become bigger players as consumers change their shopping habits.
According to I.D.D.B.A., the traditional supermarket’s dollar share of consumer food expenditure dropped slightly in 2008, despite increased dollar sales. Association research found consumers are most likely to shop frequently at traditional supermarkets are more often male, white or Asian/Pacific American, older than 45, and consider themselves “very financially secure.” Smaller stores that offer a limited assortment and are easier for customers to navigate are an important trend.
Supercenters are one of the go-to formats, along with limited-assortment stores and club stores, as consumers look to stretch their food dollars. I.D.D.B.A’.s 2009 report The New Value Shopper reveals consumers most likely to shop frequently at discount supercenters are slightly more often female, under age 45, and Hispanic/Latino American. They are having a difficult time financially, despite incomes ranging from $25,000 to $74,999 annually.
There were 144,875 convenience stores in the U.S. at the end of 2008, —a drop from the previous year that was the result of high gas prices and the recessionary economy, according to the National Association of Convenience Stores. But profits rose and foodservice sales remained strong, accounting for almost 14% of in-store sales.
Club stores, also called wholesale clubs, sell only to members who join for a fee. They are hybrids of discount retail superstores and wholesale warehouses. Sales increased significantly in 2008 and are expected to continue growing strong for several years. Consumers most likely to shop frequently at club stores are more often male, under the age of 35, and Hispanic/Latino American or Asian/Pacific American, IDDBA research reveals. They have incomes higher than $50,000 annually and consider themselves financially secure.
The dollar store format has benefitted from consumers economizing.. Consumers are increasingly turning to dollar store for consumables—food, health & beauty aids, household products, and pet food—and dollar stores are adding refrigerated and frozen cases.
Internet retailing is growing, but only 1% to 2% of all groceries are bought online. Several forward-thinking food retailers and businesses experimented with online shopping, but some have discontinued that section of their business. Operational difficulties of online food retailing include narrow margin, delivery charges and fuel surcharges, product volume management, frequent price changes and the perishable nature of some merchandise. Several successful online retailers have tweaked the business model to achieve success.
