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CONSUMERS LOOK BEYOND PRICES

LAS VEGAS -- Supercenters' growth may have retailers focused on getting prices down, but low prices aren't all that matter to shoppers, according to consumer research by Supervalu presented at the National Grocers Association convention here last week.Retailers may be able to build shopper loyalty by exploiting four trends the Minneapolis-based company identified, said Kathy Fredell, general director

LAS VEGAS -- Supercenters' growth may have retailers focused on getting prices down, but low prices aren't all that matter to shoppers, according to consumer research by Supervalu presented at the National Grocers Association convention here last week.

Retailers may be able to build shopper loyalty by exploiting four trends the Minneapolis-based company identified, said Kathy Fredell, general director of marketing information, Supervalu.

"Wal-Mart will not do the things we're talking about here," she said. "They're not doing things where we can really leverage and we can really grow."

The search for health and wellness, generational differences, the need for convenience and social connections will all impact the ways people shop for food, and these drivers don't always go hand-in-hand with price, she explained.

Rising health care costs, for instance, have led people to take their health needs into their own hands, in part by eating better.

That's often said of baby boomers. There are other generational differences, though, the research found. Boomers spend more on gourmet foods than do members of Generation Y, who prefer ethnic and organic foods.

An increase in small households also has implications. "Our traditional target market, households with kids, may not hold in three years or five years for our stores," Fredell said.

That's not all bad, though. Small households -- which tend to be headed by young singles or empty nesters -- have been increasing their spending on groceries over time, suggesting an opportunity for retailers to better serve them through smaller package sizes.

How retailers alter their strategy depends on whom they want to target.

Regardless of the answer, though, Supervalu's research showed supermarkets can do better at serving all four of these needs, Fredell said.

Consumers said they want more health information, for instance.

"What are we as retailers doing to help consumers with their quest for healthier foods?" she asked. To hear them tell it, she said, "we're not doing such a good job."

Beyond advising shoppers about over-the-counter remedies, she said, retailers should look at their delis and ask, for example, "Do you have low-cholesterol products? Do you have low-sodium products?" With supermarkets increasingly offering natural and organics, it's important to have the right mix there, too, she said.

As for convenience, retailers can help working moms by serving up meal solutions in fresh and Center Store departments, opening stores-within-stores, and with technology. When Supervalu tested deli-ordering kiosks, it found shoppers bought more items with each order, for example.

As for addressing people's emotional needs, Fredell suggested supermarkets can make their stores more inviting, with advertising messages and features such as sit-down eating areas. Retailers in other channels have fulfilled the need for social connections by making their stores destinations, she said.

TAGS: Supervalu