April 4, 2012
Why People Hate to Grocery Shop
The usual suspects made the list of companies that 24,000 consumers rated as best and worst among grocery store operators in the U.S. as part of Consumer Reports annual survey on the subject. Wegmans, Publix, Fareway Stores, Trader Joe’s, etc. all received high marks overall while Pathmark, Pick ‘n Save and Walmart did not.
In all, roughly one in three consumers dumped a particular grocery store for a variety of reasons. The one most often given was price, with 43 percent taking their shopping elsewhere in search of savings. Twenty-five percent pointed to long lines, poor selection and low quality as being behind their switch, while 17 percent cited rude employees and 14 percent mentioned crowded stores.
It’s interesting to note looking at the findings that there really are no "perfect" grocers. Even those that are rated very highly — take Trader Joe’s, for example — get low marks for parking. Anyone who has ever circled a small Trader Joe’s parking lot for 15 minutes in search of a space, knows this all too well. But the chain grades well overall because of high marks in areas such as knowledgeable staff, open checkouts and checkout speed.
The same is true for those near the bottom of the list. For all the griping that goes on about Walmart’s checkouts, people continue to be drawn to the stores by its prices.
Discussion Questions
Discussion Questions: Which problem area identified by the Consumer Reports poll is easiest for grocery stores to fix? Why apparently do so few operators choose to address obvious problems?
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I’m surprised by the data. Particularly with 43% taking their business elsewhere because of price. The question I would ask as a follow-on was how they became hyper-aware of price differences. I’m wondering if it’s more about the breaking of a brand promise (“We promise low prices,” well, maybe not so much) that it is about a penny difference on the price of milk. After all, if price was that big of a driver, Publix just would not be at the top of the heap.
Shorter lines is probably the easiest to fix. Of course, to fix it, you have to raise prices for the increased labor. Remember that CR is not a representative sample of shoppers — it skews upscale and greener. Most people clearly will put up with Walmart’s long lines (the major complaint) for the perceived lower prices.
Grocery store chains remind me of today’s airlines. Retailers have divided up in two opposite corners; low pricing and inconvenience, vs. upscale concierge style stores that also are inconvenient. As I said in the other topic area today, there really are a huge middle ground of consumers that are craving for every day stores where they can buy familiar brands, real foods, real HBC products that are not necessarily the ones found in health food stores, and they would be willing to pay a middle ground price for most of the items in the store, if the shopping experience was pleasant, convenient, and offered full service, in a nice store environment and a convenient parking lot and fast check lanes. I am based in the St. Louis marketplace where two supermarket chains do a fantastic job serving the middle ground, namely Schnuck Markets and Dierbergs.
Given the number of checkout aisles that are built into every grocery store that I’ve ever been in, clearly someone has factored and budgeted the capital expenditure and operating costs of all these checkout aisles into their business plan. Why then do customers have to wait in lines 4-6 people deep in three checkout aisles when there are another 8 closed? This is a phenomena of retail that simply remains a mystery. It is clearly on the minds of every shopper and the solution seems to be obvious. Grocery prides themselves in operational excellence when it comes to products and inventory management but human resource management seems to be elusive. In the end, it is always people that create the greatest brand affinity and engagement.
According to the Consumer Reports’ survey as well as the insights provided over the years here in RetailWire, investing time, energy and resources in the people that represent your brand seems to be worth the effort.
I have some big issues with this. Consumer Reports is the spiritual leader of price, performance, and features are all that matters. They totally don’t get experience or branding. Check out their ratings of Dyson, which revolutionized vacuum cleaners. Any survey of their readers will represent that portion of the population who has already commoditized their lifestyle.
The grocery industry in general has traditionally been a race to the bottom. It’s a low-margin industry that is most comfortable using price as its battleground. Very few retailers such as Wegmans and Whole Foods, to name a couple, have chosen to differentiate their store experience, rather than compete solely on price.
The net result is that, much like the airline industry, there isn’t much wiggle-room for improvement. Better store designs and customer satisfaction systems are all slow to implement in the category because they are looked at as “nice to haves” in comparison to those things that can squeeze an extra point of margin out of the mix.
It’s a vicious cycle created and perpetuated by the industry itself. And it takes nerves of steel for grocery retailers to break the addiction to price promotion and focus on differentiation.
Most problems are fixable but fixing only one doesn’t make a magnet for destination shopping.
As to why so few retailers don’t address “obvious problems,” I am reminded on a mother with a baby in her arms and 6 small screaming children running amok demanding attention. The house gets untidy and then the husband comes home and asks “Why don’t we address the obvious problems these kids cause?” Think about it!
There are no easy fixes. The the things consumers complain about would cost money to fix and there is no ROI on doing so. Trader Joe’s can’t add parking in the types of high rent, high traffic locations they have. Stores can’t just drop their prices 15% to match Walmart. Stores can’t just double their labor so no one has to wait in line. This country has a lot of good grocers doing things right and have sales per square foot performances well above average; Wegmans, HEB, Hy-Vee, WinCo, Aldi, Trader Joe’s, and Publix to name a few. They are winners simply because their hands are not tied by Wall Street and forced to be a plain vanilla, sterile, high priced and boring store that most publicly held chains are. We have a lot of grocers operating right now that are just a bad year away from bankruptcy. So don’t expect to see any improvements from them.
I voted knowledgeable staff because service experience is the most lasting impression and can balance against price concerns if they exist. You might be constrained by the parking lot situation. You can certainly change your sourcing and selection for produce, though there are certain areas of the US where produce will always be awful because of location, trucking distance and to a certain extent poor sourcing.
Why not address weaknesses? The customers don’t matter? Focus in on operations and not customer experience? Focus is on data to drive merchandising and profit margin decisions and not listening to the voice of customer? When was the last time you’ve seen the results in-store or in communications represented/inspired by the grocery chain investing in in-depth 1:1 consumer study?
Interesting the similarities between this topic and one of today’s other topics, “PL Buyer: Avoid the Middle.” Reading this article, one may think that a retailer must choose either “low-cost” or “high-service” strategies to satisfy the consumers in this survey. One extreme or the other. I believe there is a viable “middle” ground here, however. Most of the problems mentioned in the survey are nothing new to the grocery operator. I’ve seen a very successful TJ’s here in Los Angeles relocate only about a mile from its original location to improve parking, among other things. Sure enough, the store is so busy now that even this parking lot is too crowded. Nice problem to have, if you ask me. I’m sure few if any shoppers turn away from this store due to the parking challenges.
I think that if the store generates truly compelling reasons to shop there, then many of the issues can be rectified with redistributing labor to respond to the needs of the shoppers, which typically covers any added labor expense with the increased revenue. If the last impression the customer has of the store is a fast checkout line, then they will typically return there.
Speaking as a supermarket owner, service is the easiest, and also the hardest to fix. Either you’re in or out in regards to great service, as there is no substitute for a very friendly, and knowledgeable employee. Having enough trained help in peak times is crucial as well.
Fixing low prices is the true nightmare for most of us, as the 800lb. gorilla (you know who) makes sure none of us will ever get a leg up on them in the center-store. How many times have I said how unfair it is to try to buy an item and pay more for it than they’re selling it for? OK I feel better now, but you can be strong on the perimeter, so I’d encourage concentrating on that.
Quality is pure and simple as well. I carry premium, and private label for the choices people need to make, and always offer the very best for anyone who needs it.
Finally, there is zero excuse for rude employees. Get rid of them, and never put up with anything less than stellar service.
Based on the math above, I would focus on ‘rude employees’ which causes 17% of the shoppers to go elsewhere. This one is probably the easiest to fix through hiring or training and having the leaders of the store setting the example.
43% leave on the ‘search for savings’ — I wonder if they find them….
When tackling real issues that will effect the life of a company, putting the right tools for the task at hand is a must. Retail ownership has largely staffed management level positions with people that have either an operations or accounting background. These career fields have scant preparation for the sales and marketing skills needed to successfully address the issues raised in this discussion. The fact that many of these problems have appeared in reports like this for decades speaks volumes of the management style of those in place to correct them. And it is even more telling about the placement selection process and the decision makers in care of this ongoing mess.
Grocery shoppers aren’t supposed to like or enjoy the experience. Everybody knows that they’re supposed to hate it. That’s the common wisdom and the popular opinion. But it’s wrong. Otherwise, why would they show up so frequently and stay so long? Why do impulse items sell? The easy answers are: “We need to eat, so we have to shop,” “We stay so long because the checkout lines are so long,” and “They make us buy impulse items that we don’t need by displaying them attractively.”
All are specious arguments, excuses for personal behavior. Being “forced” to shop frequently because you have to eat? With proper planning, you can cut your shopping trips in half. Long checkout lines take too much time? In an average shopping trip of half an hour or more, the checkout process takes less than 10 percent of the total time. And if you’re in a hurry, why do you slowly cruise the aisles checking out everything of interest? They make us buy impulse items? Where’s your self-control?
We are conditioned to respond to research about grocery shopping with answers we think the researchers want to hear.
Most interesting to me was the point about high marks in, “areas such as knowledgeable staff, open checkouts and checkout speed.”
A crucial part of the shopping experience is efficiency. Sure, some shoppers plan to spend some time in the grocery store. But I’d venture to say the majority of people want to find their items, browse a bit, and check out. If a retailer can make the shopping experience swift, accessible but also enjoyable, that’s the ticket. One way to attack this issue is to introduce digital technology into the equation. Equip floor managers with iPads for quick info, install self-checkouts with mobile-capable coupon redeeming ability, etc. Ensure your shoppers know about any mobile apps you offer that will help them find the products their looking for, and perhaps some discounts on products they weren’t thinking about.
Make the shopping process more efficient, leaving time for customers to, potentially, actually enjoy their time in the store. My guess is, as more and more retailers start incorporating emerging technologies into their stores, we’ll see a whole new grocery-shopping experience arise.
Taking prices out of it completely, something that I think is not discussed enough, or addressed adequately by stores, is the complete difference in customer shopping experience depending on when one does the shopping. Here is what I mean: On those occasions when I am able to do our shopping at Dominick’s on a Tuesday afternoon at 2:00 I generally leave happy and Dominick’s is probably quite happy with my cart contents. Their large football field sized parking lot is not an issue because there are few customers and I am able to park near the door. The lot is not a minefield of loose, abandoned carts just itching to ram into my car door. At that time of week and day if I can’t find something or if a special has been picked clean from the shelf there are usually store employees available to ask and replenish. The knowledgeable meat manager is there and able to gab a bit, answer questions, and maybe even do a special cut for me. There may be only a few checkout lines open but they, plus the self checkout option still get me in and out of the store without frustration.
Contrast that to my customer experience when shopping the same store on a Friday evening or on a Saturday morning. Tons of cars and people, long (not enough) checkout lines. Stressed cashiers, sometimes bare-ish shelves, stock employees (part timers maybe?) just trying to keep up, and not nearly enough managers at the “customer service desk” to follow up and handle issues in a timely manner.
Not every family has the option to shop at 2:00 on Tuesday afternoons. But store managers (and consultants) would be wise to analyze what they can do to come close to replicating that shopping experience on Saturdays.
The primary conclusion of the study is in fact not new news: Price continues to be king as the economic situation and high unemployment (improved yes, but still extremely high) remain with us. Some 43% “fired” their store for this reason, and shoppers “put up” with other problems to benefit from low prices — such as the case with Walmart.
So what retailers need to attend to first are pricing levels. All the other issues most certainly need to be solved by smoother operations and much higher standards of associate training. All the top retailers in the report are noted for their excellent operations, great housekeeping, and, in particular, strong corporate cultures that are reflected in service-oriented associates. Nonetheless, quite frankly, the value equation has to be there to begin with, and for many Americans that value equation is the lowest possible price for necessary foodstuffs and other products.
Remember Braniff, Pan Am, Eastern Airlines, etc? Like them, grocers need to evolve, or die.
Should be no surprise that in many cases the experience of shopping has been dulled by many chains. Winners like Trader Joe’s are the exception. For other examples of a great experience check out Hispanic independent chains in Los Angeles. The moment you walk into a Vallarta or a Northgate Gonzales, all your senses are engaged with prepared food variety, fresh bakery selection, giant produce stacks and an enviable meat counter. Worth taking the time to store check.
Every problem can be addressed by hiring well. The customer experience is greatly enhanced by employees who are motivated. It’s hard to motivate the typical minimum wage employee. You get what you pay for and every retailer should invest in quality employees, and build a culture of service. When I grew up there were places to work that were cool, one grocer and not another, one drug store and not another, one warehouse and not another. The good places were places where employees were given responsibility and expected to perform. The best employees lined up to work for one guy and not another. Retail is a tough business and having employees who are just passing time make it much tougher to please customers!
Part of the issue is that we must shop for groceries. If we are shopping in a department store the comments would be better because what we buy there is a reward for our selves. Groceries are a must have like it or not, but the stores with no lines and great and helpful staff seem to have the higher prices. Lower priced stores get the crowds that create the awful reviews mentioned. Self checkouts can help, and some stores are looking at consumers using cell phones to check out. Anything that eliminates lines should help.
Price, location, and customer service are all easy to fix. It only takes a focused retailer management team to focus on these and these rapidly become non-issues. The problem with this is the cost to do it, as well as the resources required to do this (and change) are often too difficult for most retailers to truly understand and embrace. Until then, consumers will continue to go elsewhere and gripe and complain.
Friendly service! I don’t care how crowded the parking lot is or how low the prices are. If the customer is not treated with respect, they aren’t coming in. People circle the Trader Joe’s parking lot, looking for somewhere to leave the car because it’s worth the wait.
I think the larger grocery chains need to do a better job engaging the customer through a more unique experience similar to what Trader Joe’s and Whole Foods do. Display the stuff a little differently. Highlight house brand items. Offer samples of new/unique house brand items. These chains have all but lost the center store to the discounters like Walmart and they need to try to revitalize that though a combination of merchandising and pricing changes. Kroger has done a better job than some at holding onto center store but some of their divisions do things a lot better than others.
While I am familiar with the marketing challenges that retailers face in today’s competitive market place, I cannot claim any expertise behind my opinions. In light of the U.S. economy, I would think that among the retail industry, grocers are the most challenged in keeping customer loyalty. My input is primarily from a consumer perspective.
While both my husband and I contributed to a two-income household, I typically shopped at the biggest grocery chains, such as Albertsons or Kroger because of a large variety and good quality produce. During this time, price was not a motivating factor. After my husband lost his job and we became a one-income household, I progressively had to change my shopping habits and price became the primary focus.
A combination of lower income and inflationary prices have forced me to choose Walmart as my grocer of choice. In the past few years, I have also started to shop at Family Dollar for better prices while sacrificing quality. I am forced to shop at these establishments because of limited income. The cost of food represents the largest percentage of expenses in our monthly budget. I can probably speak for many other shoppers who count their blessings that they have the ability to put food on the table, even if it is not always good quality products.
I emphasize the word “forced” because if price was not the issue, Walmart would not be my first choice. Store environment and long lines are strong factors that customers consider when making a choice on where to shop. I find Walmart a stressful shopping experience because of the crowds. In addition, I often times get frustrated when a product I typically purchase is out of stock from the shelf. Not sure if this is because Walmart does not like to keep a large inventory, it does not adequately schedule stock delivery to accommodate demand, or does not have sufficient staff to re-stock the shelves when needed.
If I had the choice, I would patronize Market Street because the few times I shopped there, I like the selection and availability of products, the way the store gets the customer involved with products (i.e. samples), store environment, fast cashier checkout, and a big factor – great customer service. Parking has never been an issue. Its success can partially be attributed to its more affluent customer base. Unfortunately, its prices are more than what I can regularly afford.
When it comes down to it, today the cost of food is a major factor on where most low to middle income consumers will choose to shop. I would venture to say that good pricing, good quality products, and efficient staffing are not the easiest to attain among grocers.
I had worked in retail some years ago and feel some of the problems identified still have not changed. Two problems that can be addressed with one fix are open checkouts and parking. Stores can bulk up on cashiers at peak times (lunch hour, after work hours and weekends). More cashiers that are available during peak hours will get customers out of the store faster and thus there will be more parking available for others. POS systems track sales and the times they occur, so it is a matter of planning.