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May 12, 2008 20:24 ET

Key Challenges and Issues facing the Changing Grocery Shopping Patterns

LONDON, UNITED KINGDOM--(Marketwire - May 12, 2008) - Reportlinker.com announces that a new market research report related to the Retailing industry is available in its catalogue.

Changing Grocery Shopping Patterns

http://www.reportlinker.com/p087684/Changing-Grocery-Shopping-Patterns.html

Introduction

Grocery shopping in Europe and North America is changing as shoppers focus on value and product range. This has encouraged the development of new forms of retail channel which consumers are using in new and different ways. This report explores attitudes towards the different factors shaping the retail environment and how shoppers are behaving as a result of this.

Scope

  • Analysis of consumer attitudes and behaviors with regard to shopping including store selection and in-store choices
  • Key data including grocery shopping frequency and value share of different store formats
  • Detailed recommendations offering practical strategies based on the trends and insights uncovered in the report
  • Covers countries across Europe and North America; France, Germany, Italy, Netherlands, Spain, Sweden, UK and the US

Highlights

Grocery shopping in Europe, North America and indeed around the world is changing in two main ways. Firstly, shoppers' attitudes towards the different elements of the retail offer are shifting. And secondly, these changing attitudes are encouraging the development of new forms of retail channel which shoppers are using in new and different ways

With a 15% share of French grocery retailing and more than 4,000 outlets by 2007, discounter store share of value sales has grown by 50% over 200207, while the number of outlets has almost doubled. More than two-thirds of the French public are now customers of one of the discounters, a number that has also significantly increased

The paradox balance between offering range variety and simplifying the shopping experience is an important issue for retailers to resolve. Manufacturers and retailers therefore need to find the "choice sweet spot" by editing the choices for their targeted customer while manipulating the number of choices and then assessing customer reaction

Reasons to Purchase

  • Understand the attitudes driving shopping patterns including store choice and point of purchase behavior
  • Obtain consumer survey and store format data allowing you to identify the changing priorities of today's shoppers in developed consumer societies
  • Improve your marketing and in-store proposition by following specific actionable recommendations and by identifying industry best practice

Overview 1

Catalyst 1

Summary 1

EXECUTIVE SUMMARY 2

TREND: Value has become the most important influence over store choice 2

TREND: The desire to trade-up is also shaping shopping behavior 2

TREND: The types of shopping trip are changing 2

INSIGHT: Stores have become more specialized in response to the key trends shaping shopper preferences 2

INSIGHT: Differentiation is noticeable through private label, convenience and healthier eating 3

INSIGHT: Although most people demand range, for many expanding choice is now too great 4

INSIGHT: Retailers are adapting to new patterns of grocery shopping 4

ACTION: Boost your value offerings 4

ACTION: Help supermarkets to compete other than on price 4

ACTION: Focus on in-store tactics 4

Table of Contents 5

List of Tables 6

List of figures 7

THE FUTURE DECODED 8

INTRODUCTION: Grocery shopping in Europe, North America and indeed around the world is changing in two main ways 8

Shoppers' attitudes towards the different elements of the retail offer are shifting 8

Changing attitudes are encouraging the development of new forms of retail channel which shoppers are using in new and different ways 8

TREND: Value has become the most important influence over store choice 10

Evidence points to a growth in value-oriented shoppers 10

The changing nature of the store mix accentuates the influence of value 11

TREND: The desire to trade-up is also shaping shopping behavior 12

The rise of the 'sacrificial consumer' reflects the tendency to both trade-up and trade-down 13

The emerging demand for superior customer service reflects the quality and experience focused shopper 14

Take-outs and implications: mass market grocery retailing is all about value-for-money 16

TREND: The types of shopping trip are changing 16

The average number of shopping trips is increasing 18

Differences in the frequency of grocery shopping by demographic are minimal 20

A demographic group that is one of the fastest-growing shopper segments is men 21

Take-outs and implications: FMCG industry players need to respond to the growing diversity and spontaneity associated with grocery shopping 21

INSIGHT: Stores have become more specialized in response to the key trends shaping shopper preferences 22

The rise of grocery discounters reflects the trend towards price-led value 22

The continuing rise of convenience stores has been an established feature of developed consumer markets 23

Specialist natural food stores still account for a small proportion of sales but are gaining in popularity 25

More specialist types of store that cater to the specific needs of their target market tend to be rewarded with greater customer loyalty 27

Supermarkets and even hypermarkets are under pressure as consumers switch to specialist stores 28

Take-outs and implications: it is no longer a case of making products available for retail but ensuring the right products are available in the most appropriate channel formats 29

INSIGHT: Differentiation is noticeable through private label, convenience and healthier eating 29

Private labels are increasingly considered credible options in the same manner as 'famous brands' 29

Private label is satisfying shoppers' contradictory demands for premium goods offering good value 30

The depth and quality of home meal solutions is a big draw for convenience driven consumers 31

Natural & organic ranges become an increasingly important factor shaping store choices and point-of-purchase behavior 31

Freshness is a key trend with particularly strong relevance for retailers 32

There are potential problems associated with expanding ranges 33

Take-outs and implications: leading retailers are responding to big issues influencing consumers at large 34

INSIGHT: Although most people demand range, for many expanding choice is now too great 35

More than half of European and US shoppers agree that there is too much choice 35

Overwhelmed by choice, consumers are 'speed shopping' and deliberately using a screening filter 36

This is leading to a more passive approach to shopping 36

Take-outs and implications: the paradox balance between offering range variety and simplifying the shopping experience is an important issue for retailers to resolve 37

INSIGHT: Retailers are adapting to new patterns of grocery shopping 37

Experiments at Wal-Mart reflect the success of fresher, healthier offerings in traditional supermarkets 37

Discount natural & organic stores are emerging 38

Tesco is targeting an unmet need with Fresh & Easy stores in the US 38

Take-outs and implications: the speed of change in the grocery retail landscape is increasing, creating evermore new product development and sales opportunities for manufacturers to seize 39

ACTION POINTS 40

ACTION: Boost value offerings through emerging distribution opportunities and new product concepts 40

Make concerted efforts to supply discounters 40

Develop value brands 41

Develop 'everyday luxury' products 43

Take-outs and implications 44

ACTION: Help supermarkets to compete on factors other than price 44

Learn from the success of natural food specialists 44

Work with retailers to offer best practice meal solutions 46

Help to reinvigorate center store sales 48

Understand that retailers will want to use private label 48

Supply innovative private label products 49

Take-outs and implications 49

ACTION: Develop products for convenience stores 50

ACTION: Focus on in-store tactics to ease choice complexity and communicate with shoppers 51

Increase in-store advertising 51

Use in-store marketing to target men 52

Recognize when choice can be simplified 53

Take-outs and implications 55

APPENDIX 56

Methodology 56

Further reading and references 56

Ask the analyst 57

Datamonitor consulting 57

Disclaimer 57

List of Tables

Table 1: Consumer survey: countries ranked by the growth of value-oriented shoppers 10

Table 2: Consumer survey: the changing role of value in choosing grocery products among European and US consumers, by country 11

Table 3: Consumer survey: European countries and the US ranked by the growth of trading-up-oriented shoppers 12

Table 4: Consumers survey: the changing role of trading-up in choosing grocery products among European and US consumers, by country 13

Table 5: Consumer survey: European countries and the US ranked by the growth of value-oriented and trading-up-oriented shoppers 14

Table 6: Consumer survey: European and US consumers' willingness to pay extra for better customer service by age group and country 15

Table 7: Consumer survey: European and US consumers' willingness to pay extra for better customer service by gender and country 16

Table 8: Types of US grocery shopping trip by frequency and value 17

Table 9: Types of US grocery shopping trip by day of the week 17

Table 10: Consumer survey: average frequency of European and US based grocery shopping by country 19

Table 11: Consumer survey: the composition of European and US grocery shopping frequency by country 20

Table 12: Composition of grocery shopping frequency by age group 20

Table 13: Composition of grocery shopping frequency by household income 21

Table 14: Value share of discounters in western Europe, by country, 2002-07 22

Table 15: Value share of convenience stores by country, 2002-07 24

Table 16: Value share of specialist natural food stores by country, 2002-07 26

Table 17: Specialist natural food store chains in Germany 27

Table 18: Value share of supermarkets and hypermarkets in France, Germany and the UK, 2002-07 28

Table 19: The development of private label, 1970s to 2000s 30

Table 20: Potential winners and losers from the fresh trend 33

Table 21: Consumer survey: the extent that European and US shoppers believe there is too much choice when shopping, by age and country 35

Table 22: Consumer survey: the extent that European and US shoppers believe there is too much choice when shopping, by gender and country 36

Table 23: Presence of private label in different US grocery store formats, 2002-07 40

Table 24: Consumers who seek discounts and express satisfaction from value, by country, 2005 43

Table 25: Penetration of US private label by type of shopping trip 48

Table 26: Industry opinion: ways in which private label could be better promoted 49

List of Figures

Figure 1: Value is an increasingly important motivator of consumer behavior 11

Figure 2: The changing role of trading-up in choosing grocery products 13

Figure 3: Spanish and Dutch consumers embark on the most grocery store visits per week 18

Figure 4: The composition of grocery shopping frequency varies by country 19

Figure 5: Examples of US premium private labels 31

Figure 6: Supermarket traffic at the perimeter versus the center store 34

Figure 7: Discount natural & organic stores are emerging across Europe and the US 38

Figure 8: Tesco Fresh & Easy 39

Figure 9: Two Buck Chuck wines are a real draw for shoppers seeking price-led value 41

Figure 10: Charmin Basic and the possible private label response 42

Figure 11: Larger pack sizes have strong value credentials 42

Figure 12: Giant Eagle's Market District range reflects an emerging product concept: 'everyday luxury' 44

Figure 13: Products that suggest a more personal nature can help mass market retailers counter the selling points of smaller, more specialist stores 45

Figure 14: Featuring actual farmers is a way that Waitrose has personalized its marketing in the UK 46

Figure 15: Best practice meal solutions in the US include Eat Local, Central Market, Apron's 47

Figure 16: Whole Foods Market meal solutions 47

Figure 17: Products developed specifically for the convenience store market 50

Figure 18: Convenience and premium: Harrods 102 convenience store 51

Figure 19: In-store marketing; end aisle display and floor advertising 52

Figure 20: Helping store navigation: Best Cellars 53

Figure 21: Helping consumer choice: Hormel's Custom Kitchen 54

Figure 22: Color blocking and unique shapes can be used to create visual contrast 55

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Changing Grocery Shopping Patterns

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