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August 20, 2004
PRESS RELEASE
- FOR IMMEDIATE RELEASE
Editorial inquiries,
contact:
George Anderson
908-709-1690
geoanderson@retailwire.com
Experts
Offer Answers To Stem Grocery Market Share Losses
Given
Choice, Consumers Shopping Elsewhere
A
funny thing happened on the way to the grocery store.
Consumers discovered they could find the very same items
they planned to buy at the supermarket for sale at the
local drugstore, convenience store, dollar store, discount
store and e-tail Web site, saving themselves time and
sometimes money.
The
numbers bear it out. Given a choice, more and more consumers
are shopping somewhere other than the supermarket to
get their groceries.
According
to the supermarket industry trade association, the Food
Marketing Institute (FMI) in Washington, D.C., the number
of consumers who said the supermarket was their primary
outlet for buying groceries fell from 81 percent in
2002 to 72 percent last year. At the same time, the
number of consumers who shop primarily in supercenters
such as those operated by Wal-Mart and Target increased
from 15 percent to 21 percent.
RetailWire (www.retailwire.com),
the unique online news and analysis forum covering all
things retail, recently opened the topic of consumer
choice and migration to other shopping channels up for
discussion by its BrainTrust of industry experts.
"Consumers no longer see channels defined by what is
available in the store, but rather by how it is presented,"
said BrainTrust panelist, Ben
Ball, a vice president with Dechert-Hampe & Company,
a management consulting firm in Chicago. "My Jewel has
an OSCO drug store and liquor department. The freestanding
Walgreen's in the corner of the Jewel parking lot has
dry grocery and a liquor department. One had twenty
parking spaces, two checkouts and a drive-thru pharmacy.
The other has two hundred parking spaces, ten checkouts
and a walk-up pharmacy. And the difference is...."
Ryan
Mathews, futurist and founder of Black Monk Consulting
in Eastpointe, Mich., said those running supermarkets
need look no further than their own customers for the
answers they seek. "The consumer doesn't exist! People
do. And, some people need that 20 percent price differential
while others would be willing to pay a 40 percent price
premium if they could save 10 minutes or have their
egos stroked or both," he said. "Supermarkets have lost
share because retail options have increased and lifestyles
have changed. If we're ever going to understand what
drives consumers, we have to quit thinking about them
in the abstract and begin understanding them as individuals."
Russell
Jones, president of Decisive Technology LLC echoed the
opinions expressed by BrainTrust panelist Mathews. "Consumers'
preferences are not constant, not even those of an individual,
and not even from one day to the next. In fact, I will
tell you that I hate department stores even while I
spend thousands of dollars each year in one. Some days
I will avoid Wal-Mart and other days I will be happy
to visit. I'll go to Staples for a pen - or browse the
stationary aisle at CVS. I'll buy books at Borders,
Barnes & Noble and Amazon.com. And here's the painful
truth for retailers - none of these retailers does such
a great job that I would stop shopping at any of the
others. And I'm not alone," he said.
"Grocers who view themselves as offering basic commodities
will struggle as more channels offer those commodities.
Grocers who recognize that they need to solve consumers'
needs - for better nutrition; for interesting meals;
for personal service while shopping - can continue to
thrive," said Jones.
---
The
complete RetailWire.com discussion forum entitled "Grocery
Options Galore" can be viewed at: http://www.retailwire.com/email/discussion.cfm?doc_ID=10064
###
About RetailWire.com
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in February 2002. RetailWire goes beyond conventional
headline news reporting. Each business morning, RetailWire
editors pick news topics worthy of commentary by its
"BrainTrust" panel of industry experts, and the general
RetailWire membership. The results are virtual round
tables of industry opinion and advice covering key dynamics
and issues affecting the retailing industry.
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is free to all qualified retail industry professionals.
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inquiries, contact:
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973-744-0813
moss@retailwire.com
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information, contact:
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Editorial inquiries,
contact:
George Anderson
908-709-1690
geoanderson@retailwire.com
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