Photo: RetailWire
Are stock-up grocery trips becoming a thing of the past?
A new study says that a lot of shoppers today don’t like to linger, and that’s something retailers might want to take note of.
Almost half of shoppers (46 percent) view shopping as a chore, according to a new Nielsen report discussed in Convenience Store News. That reluctance to spend time in stores has led to a decline in big stock-up grocery trips in favor of more need-based trips. Only 10 percent plan as far as ahead as the meal they’ll be having later that day, according to the study.
These changes in shopping habits could explain what has been going on in segments dependent on stock-up shoppers, like warehouse clubs.
As far back as 2014, Costco began noting difficulties reaching younger shoppers and discussed adding organic offerings in order to appeal to both Millennials and health-conscious older customers. This year’s closing of 63 Sam’s Club stores likewise points to warehouses not having the draw they once did.
Smaller and more nimble startups may be waiting in the wings with smaller format stores. Warehouse-style online retailer Boxed, for instance, was gesturing at moving omnichannel with standalone stores earlier this year (after rejecting a $400 million buyout offer from Kroger).
Other retailers have been taking steps to cater to the speedier shopper, in part by going smaller.
Target, for instance, has successfully tackled urban environments that had once been tough to crack with its smaller, flexible-format stores.
Smaller stores now account for 25 percent of fast-moving consumer good sales and 70 percent of shopping trips, according to Convenience Store News.
Target has also been reworking the design of its larger mainline concept in part to speed things up for those looking to get in and out quickly. Last year, Target announced a “dual concept” store redesign that features two separate entrances. One leads shoppers to a department store-style layout for those apt to dwell. The other leads shoppers to grab-and-go foods, wine and beer and a spot to pick up orders.
- Nielsen: Convenience Is Ultimate Currency in Today’s FMCG Marketplace – Convenience Store News
- Does a Boxed acquisition make sense for Kroger? – RetailWire
- Boxed Rejects Kroger’s $400 Million Purchase Offer – Bloomberg
- Does Costco have a youth problem? – RetailWire
- Sam’s Club takes on Costco and Amazon with a new strategy – RetailWire
- Forget Kroger, will Boxed open its own stores? – RetailWire
- Gallup Poll says consumers prefer to shop for their own groceries – RetailWire
- Will ambitious store redesign lift Target to new heights – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: What have you seen retailers doing to successfully facilitate smaller, faster trips? What can big box operators do, aside from rolling out smaller store concepts, to meet the needs of fast trip shoppers?
Poll
BrainTrust
Bob Amster
Principal, Retail Technology Group
William Hogben
CEO, FutureProof Retail
Our data also show a decline in the number of consumers undertaking big grocery shops. There are several implications. First, the number of grocery stores used has gone up, so spend is spread more thinly among more players. Second, the way in which consumers use stores has changed — fewer visits to the center aisle, more focus on quick meal fix areas like the deli counter, etc. This change is big and is one of the forces reshaping grocery.
It may be me, but I find myself going to multiple grocery stores (ACME, Trader Joe’s, Cobb’s Bread, and a local upscale country market) and purchasing my family’s favorite products from each. I actually spend more time shopping this way but I don’t compromise on brands, quality or flavor.
I do something similar! And I don’t think we’re alone. Grocery shopping has become much more fragmented than it used to be!
I shop like that, too.
Same here. For certain products our family loves to have, we’ll shop at multiple stores when needed. We try to plan ahead sometimes so one week we may go to different grocery stores than the next to reduce the number of trips overall each week.
Very astute observation about split shopping, Neil. When more shoppers cobble together a household pantry solution using 3 or 5 or more grocery product retailers, each store must adapt to compete with known and unknown rivals.
This also means nearly all grocery sellers — physical or digital — are “flying half-blind” with respect to their membership or loyalty programs. Each retailer can only see a partial picture of household buying patterns, which makes it nearly impossible to visualize their true preferences or potential lifetime value.
This is also due to the consumer interest in fresh. You don’t buy a month’s worth of fresh corn like you could have purchased a month of frozen corn like our parents. This is part of the reason the middle of grocery stores are dying — fewer people want provisions; they want fresh food.
Smaller stores make much sense for the customer and the retailer. For the customer, it’s more convenient to get in and get out. For the retailer, there is less rent and overall overhead. However, it’s important not to lose sight of those who do like to shop. Many stores are just not designed or merchandised for convenience. It’s not necessarily the size. For example, take the store that has you walk all over looking for the item so that when you find it, you can’t understand why it was on an obscure shelf and not where common sense suggests it should be. Even when asking the store associate, they too are surprised to see where it was. These situations happen often. Also, big stores don’t always have a convenient checkout system and either have too few registers open or, if they are spread out throughout the store like a department store, it’s hard to know which ones are open.
The point is that the shopper too often is frustrated and easily gets disgruntled when shopping stores that are not easy to navigate and do not allow them to check out quickly. Retailers need to look at everything before just assuming smaller stores are the answer. The best way is not looking at blanket data but to listen directly to YOUR customers.
Again, generalizations don’t work here. The answers depend on product categories. Bob Phibbs is right. If you want fresh you shop daily (like my mother did). The Costcos of the world have made it easier to stock up on dry goods and packaged goods and save money in the process, if you can front the money and have the space to store the products. Judging from the sales reports and other articles, both trends are in motion; multiple trips of short duration for fresh products, fewer trips of larger value for packaged goods.
Agree, and also potentially worth noting that lots of those “stock up” items and packaged goods can be bought easily online with added convenience and potentially better prices. You also don’t need to buy 100 rolls of paper towels because the shipping is free and you can now subscribe to save even more.
I’m hoping you all realize that this is a global study, not a U.S. study. This may have nothing to do with U.S. shopping patterns changing. The clue — there is no way that 70 percent of U.S. shopping trips are at small stores.
It’s tough to generalize without understanding the “benefit segmentation” of the shopper. Is the customer shopping for a large family, where a stock-up run to Kroger or buying bulk quantities at Costco makes practical and economic sense? Or is the grocer targeting a smaller household (downsizing Boomer, or Millennial in an apartment) where there simply isn’t enough room to stock up? Does the shopper live in the suburbs and drive an SUV, or is she an urban dweller with easy access to home delivery?
You get my point — although if there is a common thread that may drive more frequent and smaller trips, it’s the desire for more fresh product and the parallel desire to reduce waste.
I am noticing these grab-and-go merchandising upgrades at Aldi for instance. Shoppers can now go down the first aisle for coffee, snacks, bread, refrigerated produce, eggs and milk and then veer to the checkout without traversing any other aisles.
There is no debate that people are busy and value their time – and it seems like this is amplified every year. Stores recognize this and are catering to customer needs with services and stores that make shopping easier and faster – smaller stores, meal kits, prepared meals, online ordering, curb-side pickup, home delivery, and the list goes on.
There are some shoppers that continue to have the stock-up shopping trips, as there are many things they buy repeatedly every week or month. Retailers need to make the process easier for reoccurring shopping trips and offer incentives for them to buy these items from their store. Maybe a special discount for purchasing X of the same item in a specific time period.
Shoppers are definitely looking for fast and efficient ways to shop hence the increase of in-store lockers by Whole Foods and Walmart but, after talking to multiple groups of shoppers, I have found there is a significant desire for a hybrid shopping model. When families are running around over the weekend they want to get in and get out as quick as possible however when there is a big BBQ or holiday event they want to take their time and find the perfect items for their recipes at the right price. Grocers need to remember this.
Big box operators are doing some great things such as offering digital commerce and getting involved with Instacart. The biggest thing they need to continue to do is to keep the checkout lines short and fast.
There is definitely a trend toward smaller average item counts per transaction in food and mass discount stores. I see this as somewhat generational. Baby Boomers have a hard time getting away from stocking up. While younger people make more trips per month comparably.
I actually think food and discounters have catered to smaller transactions better over the past decades, and have even gotten ahead of this trend … to the detriment of the large stock-up orders. Large orders have rarely been prioritized by retailers, which is counterintuitive because you’d think the merchant would want to cater to the large orders. Now, with the transactions trending smaller, I suppose this will become less of an issue.
Over recent weeks these columns have been full of grocery retailers improving their online offering and today we see that latest, and possibly most significant, move of online retailers opening stores.
People are becoming ever-more savvy in the way they shop, whether it be Millennials or the Grey Dollar. All consumers are mixing and matching their shopping habits to suit their lifestyle. Most people today do not bulk buy as convenience has taken over as the prime driver. That convenience could come from online and home delivery or click and collect, or it could come from community stores. What is becoming ever more apparent is that to be successful a retailer needs to cover these forms of shopping behavior in its strategy. This is difficult for the clubs, which built their business on major shopping trips. There may be some comfort, however, as Walmart posted great results last week and a major part of their improvement came down to price. This is still a major driver and whatever other strategy and channel you operate you will ignore this at your peril.
Prophetically, for some years now Herb Sorensen and a few others have advocated that the dimension of “shopper’s time” be included in the array of metrics physical store retailers rely on to improve their in-store engagement. There is no doubt that shoppers’ expectations of brick-and-mortar retailers are changing, given the number of new options they have to choose from — all of them more efficient than large-footprint retail stores. Measuring and improving the dollars spent per minute in the store is a good start in improving the efficiency of the store, with efficiency being defined as getting items that shoppers want in front of them quicker, without requiring the shopper to waste time venturing to all corners of the store to complete the shopping trip.
However the notion of bringing the product to the shopper instead of luring the shopper to the far reaches of the store represents a significant paradigm shift for most retailers. Nonetheless the results, if done correctly, will be larger baskets, more loyal, appreciative shoppers and, above all, survival in an increasingly competitive marketplace.
Convenience stores are hitting grocery stores hard – for smaller trips it’s nicer not to have to wait in line! Grocery stores and big box operators don’t need smaller store concepts, they need more convenient ones – and mobile checkout/Amazon Go-type initiatives are the way forward there.
I had this conversation not too long ago with my daughter and a few of her friends. They still shop to stock up because it’s easier to do it all at once when you have small kids, but they spend more time shopping the perimeter of the store because they want fresh and organic choices. And they visit different stores for different things. I find myself visiting the grocery store every few days now because I also want the freshest choice available.
Everywhere you look ads are about fresh fruits, vegetables, and meats that are ready to cook and eat, instead of frozen to thaw and cook next week. Consumers are responding to ready-to-cook meal kits that are available in stores. And grocers are getting smart with merchandise outposts. My go-to grocer now displays a selection of meats, potatoes, side dishes and desserts on the produce side of the store, just inside the front door. Old school thinking would be to put these displays at the rear of the store but that’s changing, too. Time-starved shoppers want easy grab and go.
I’m not seeing any mention of consumer access to buying bulk items for less (paper towels, cases of bottled water and even smaller items like shampoo that last a long time) online. Shoppers can now avoid the stock-up nature of shopping trips to focus on what they need in the near future. It all plays into what current behavior looks like. We have to see beyond the numbers that simply highlight grocery store transactions before we can plan future strategies.
Yes, plus if you’re ordering — say paper goods — online, you actually don’t even need to purchase bulk to get the discount. You can just “subscribe” to it. So for everyone living in a city, or low on storage, it’s the best of all scenarios. And if you’re in suburbia, the free/2-day shipping is huge time benefit. It’s hard for me to look at the landscapes and the demographic data and not imagine that every major category besides “fresh” has major online upside. Big categories like household, snacks, beverage, condiments, pet care, etc. — why not online?
Smaller stores. There’s a 30,000 square-foot Whole Foods in our area and I can hit that for just about anything, including an entire grocery trip, in less that 45 minutes. It’s excellent compared to their 150,000 square-foot store north of here. I’m sure that Target and others are finding out the same thing now; that convenience and frequency are more important than ever. Aldi already knows that fact. Someone should tell Giant Eagle and Kroger that as they continue to open massive stores.
There are surveys and then there are other surveys. How many say shoppers do not like to go grocery shopping? So now we are to believe they prefer to go grocery shopping “several times” as needed as opposed to “once” for a big stock up. Huh?
I agree this article could have benefitted from comparative numbers (from prior years), as the claim is at odds with what I’ve observed (ever-larger stores); perhaps the Bay Area is atypical (or maybe I’m a poor observer … both seem like possibilities).
The weekend shopping trip is still common in part because customers don’t have time during the week to purchase, especially for working families. See the FMI 2017/2018 reports. What I believe Neil and others astutely noted was the focus on perimeter sales — deli, bakery, meats, seafood, produce, floral, etc. by customers. A focus on perimeter is not new, though — it usually captures the highest profit margins for grocers. This growth also doesn’t prompt smaller, more frequent trips. The customer expects fresh to be available on any trip.
The small, faster trip exists, but usually this is what you’re picking up on the way home from work and is usually tied to immediate needs, such as the milk needed for the next day or more likely dinner that evening.
Speeding up time, accuracy and checkout speed are important solutions — especially for fast shoppers. For many grocers it’s about mapping customer segments to their own customer base with better analytics and in-store layouts rather than store formats. Grocers like Wegmans and others have adopted faster tech at checkout like Digimarc watermarking instead of bar code scanning. Scandit is working with Ahold Delhaize and Sainsbury for rapid camera vision scanning. RFID may also be coming to groceries in the future.
There are many reasons why stock-up trips have declined. Not the least of these is a change in what people consider a meal. Historically a meal was something where the potential ingredients necessary were purchased ahead of time. A decision was made what was going to be consumed and the items were selected from the pantry.
Today that has been replaced for many by buying a meal that is fully or partially prepared at a restaurant or a supermarket. Other options include the home delivery of the necessary ingredients by one of the mealkit companies or ordering online and having the items delivered for the local retailer, a restaurant, Amazon, etc.
Supermarkets are aware of all these trends. What they should do is simple to state but not to execute. They should accept the change is happening and learn how to do business the way today’s consumers want.
Grocery trips with the goal of filling up the shelves at home are gone. That dilemma has created the mandate for grocers to be the best merchants, maximizing shelf space creatively, presenting produce in beautiful settings and constantly telling product stories with marvelous display techniques. And that’s all happening on the perimeters.
No question grocery shopping trends have changed, In our household, for example, we frequent the local farmers market as well as two local farm stores for the majority of our fresh foods (produce and meats) and rely on multiple grocery stores for packaged staples and other convenience and pantry items. We’re also finding ourselves asking who will be the first brand to bring grocery delivery to our area. That first-mover advantage is going to work well for whichever brand arrives first in our neighborhood as adoption will be quick by many based on conversations I’ve had with neighbors.
As consumers have moved closer to experiential vs traditional shopping models, the “need for speed” in certain product categories, such as grocery, has become increasingly important.
An interesting test for a big box such as Target would be to build what I’ll call “TarGET & GO” in the far end of a parking lot of one of their stores. This mini store could be only a few thousand square feet and would accommodate customers who are in a hurry. They could stock the mini store with best sellers in food, snacks, paper products in addition to other items. This way the big box is accommodating both customer types.
One advantage of the “parking lot” mini store is the ability to feed off of the main stores’ inventory. This would help with maintaining excellent in stocks and the ability to feature different items and change them frequently (giving the mini store a fresh new look for customers who shop frequently and potentially add-on sales). Video and/or signage in the mini mart could be used to entice shoppers to the main store on a future visit with new products, store changes or sales.