Supermarkets, rethink trip appeals
Which kinds of trips do your stores attract – and which kinds of consumers?
Since the recession hit and recovery has been at snail speed, members of all demographic groups have reset the ways they plan to shop, actually shop and consume goods. What retail marketers thought they knew about segments of the buying public they draw, and the kind of buying they do, has changed.
“The American shopper has many faces today,” says a SymphonyIRI Group report, The CPG Basket: Fostering Growth in a Time of Conservation, which describes three kinds: the downtrodden, who are pessimistic about their financial situations; the optimistic, who feel they’re better off today than a year ago; and the savvy, who feel about the same as a year ago and enjoy seeking deals.
Mix in the all-food Consumer Price Index gains of 3.5%-4.5% in 2011, and the anticipated 2.5%-3.5% in 2012 cited by The Food Institute, and the report concludes: Today “is a time of conservation. Consumers are discerning about the money they spend today….It is expected the economy will remain weak and unstable, and consumers will remain firmly entrenched in efforts to stretch their budgets.”
Which explains why Quick Trips, with the smallest expenditures, drive the majority (56%) of visits to U.S. retail stores. Yet they yield just one to five items and less than $40 in basket size, and account for just 24% of all-outlet CPG dollars spent, the report shows.
This is bad news for supermarkets, which are built for stock-ups, says F3, urging operators to rethink and reformat to align with shopper missions on the more frequent Quick Trips.
By comparison, notes SymphonyIRI Group:
• Special purpose trips yield two to ten items and $20-$50 baskets. They account for 16% of all trips and 18% of all CPG dollar volume.
• Fill-in trips yield five to 15 items and $30-$80 baskets. They account for 14% of all trips and 19% of all CPG dollar volume.
• Pantry Stock-up trips yield 15 or more items and baskets of $50 or more. They account for 13% of all trips and 39% of all CPG dollar volume.
The report flatly attributes any year-over-year gains in basket size to price inflation
The report further shows that in 2011:
• Quick Trips accounted for about three-quarters of shopper visits to drug (78.3%) and dollar (74.0%) stores, and about half of the trips to supermarkets (49.9%). These same trips drove about half of the dollar volume at drug (52.7%) and dollar (48.5%) stores, but less than one-fifth of the volume at supermarkets (18.7%).
• Supermarkets are far more reliant on Pantry Stock-up trips, which drive half of their dollar volume (49.8%) on just 18.6% of store visits. Their heaviest competition for these big baskets comes from mass merchants/supercenters (39.1% of their dollar volume on just 15.1% of store visits) and wholesale clubs (35.6% of their dollar volume on just 15.3% of store visits).
• Quick Trips are growing fastest across the middle and upper income brackets.
