Supermarkets are managing to please shoppers by meeting competitors head-on.
A national consumer survey commissioned by SN found shoppers are enjoying their supermarket trips more than they did a couple of years ago. And the supermarket shopping experience far outscores that of other food retail formats, consumers said.
Supermarkets are getting high marks partly by taking on competitors at their own game. They are battling convenience stores with convenience, drug stores with good values, restaurants with prepared food, and warehouse clubs with big packs. While these efforts haven't been completely successful, they are being noticed and are improving the overall perception of supermarkets, shoppers said.
The survey provided some other insights for supermarkets, among them:
Consumers like supercenters, but don't necessarily want their regular supermarket to become supercenter-like.
Shoppers see the biggest supermarket values in traditional grocery items, possibly indicating these stores still need to bring the value message to other parts of the store.
Respondents stress variety as a positive attribute of supermarkets at a time when retailers are working to alter their assortments and reduce certain stockkeeping units.
The survey, conducted for SN by America's Research Group, Charleston, S.C., sampled 1,000 consumers.
Probably the best news for supermarkets is that 73.2% of respondents rated this retail channel as the one providing the best overall experience for food shopping. The next closest formats weren't close at all. Warehouse clubs scored 13.2% and supercenters 5.9%. Butchers, at 2.8%, got a better rating than convenience stores or drug stores.
Asked the reasons for choosing a particular format as their top pick, 35.2% pointed to price, 19.7% to location, 18.8% to quality and 13.1% to variety. Britt Beemer, chairman of America's Research Group, noted that the price message comes through loud and clear in these results and is supported in responses to other parts of this survey. "The fact that price is No. 1 indicates how much importance the consumer places in this area."
Also good news is that 35.4% said their supermarket shopping trip is improving compared to one or two years ago, while only 1.8% said it is declining and 62.8% said there was no change. Asked to state the main reason for any change, 47.6% pointed to more variety, while 30.9% cited service improvements and 11.6% said quality advanced. The high marks for variety come at a time when category management and SKU reduction efforts are in vogue. It's not clear if the perception of increased variety comes as a result of these efforts, or serves as a warning that too much tinkering with variety could be dangerous.
Mona Doyle -- president of Consumer Network, Philadelphia, and an expert on consumer attitudes -- said her organization's research also has shown very positive consumer feelings about supermarkets. "We've found that consumers really do like supermarkets," she said. "I don't think supermarkets always take advantage of the bond they have with consumers. They have the opportunity to sell the store as a source of health and good times."
SN's survey results showed that supermarkets have a good starting point in prepared food and meals, even if they have big challenges ahead. More than 70% of respondents said these stores are either very good or excellent in providing quality prepared food. A total of 26.2% said supermarkets were just OK in this effort, while fewer than 2% said they were not very good or poor.
Consumers were also asked how supermarkets compared in the last couple of years to moderately priced takeout restaurants in terms of providing quality prepared food at a good value. A total of 41.3% said supermarkets were not as good, but improving, while 13% said supermarkets had become better than those restaurants. As a result, more than half of respondents had something good to say about how supermarkets measured up. Some 37.8% said they noticed no change during that time period, while 3% said supermarkets had declined in comparison.
When shoppers were asked to similarly compare supermarkets vs. fast-food restaurants over the last couple of years, supermarkets also did well. More than 29% said supermarkets weren't as good, but were improving, while 22.1% said supermarkets pulled ahead in the competition. A total of 40.8% of shoppers said they hadn't noticed a change, and only 2.5% said supermarkets weren't as good and were declining in comparison.
Shoppers were also asked to characterize supermarkets' ability to provide large-sized or bulk items at value prices. More than 41% rated supermarkets either very good or excellent, undoubtedly due to the bulking up supermarkets have done in this category. About 38% were somewhat less enthusiastic, rating supermarkets satisfactory in the big-pack department. Finally, 18.5% said supermarkets could do a better job and 1.8% gave a poor rating.
Shoppers might admire the supermarket efforts in bulk packs, but only 9.2% said supermarkets had pulled ahead of the clubs in this type of merchandising during the last couple of years. A total of 37.9% said supermarkets were not as good, but improving recently. Meanwhile, 42.8% said there was no relative change between supermarkets and clubs over the past couple of years, and 2.4% said supermarkets were not as good and declining.
The survey also delved into consumer perceptions about the values supermarkets provide and how those compared to perceptions of drug stores. Almost 50% of consumers rated supermarkets as very good at offering good values, and 22.6% gave an excellent rating. A total of 26.8% said supermarkets were just OK, and less than 1% said not very good.
After giving such ratings on value, shoppers were asked to detail what items they were referring to. The answers appeared to center on non-fresh-food categories: 40.2% said packaged food, 20.1% snacks and 18.3% beverages. In contrast, only 3.6% pointed to meats, 0.7% to vegetables and 0.1% to fruits. While the answers are far from definitive (packaged food could imply a wide range of items), the responses overall seem to indicate that shoppers don't view the fresh-food side as providing the best values. This might mean supermarkets have an opportunity to extend the center store value message into prepared food and meals.
After being asked about supermarket values, shoppers were told drug stores and discount stores that sell food are sometimes known for sharp prices on grocery items and nonfood items like drugs. They were asked how their grocery store compared to drug or discount stores in terms of value and prices over the last couple of years.
More than 33% said supermarkets had become better than drug stores and 28.9% said supermarkets were not as good, but improving. That compared to only 1.3% who said supermarkets were not as good, but declining, and 36.2% who said they saw no change. Supermarkets drew favorable responses on the subject of convenience despite the worries of some in the industry that larger stores would turn off consumers. A total of 59.8% of shoppers rated supermarkets very good in their ability to offer a relatively fast and convenient shopping trip. In addition, 13.7% rated supermarkets excellent in that regard. Almost 24% called supermarket convenience levels just OK, while only 2.2% said they were not very good.
Despite the good numbers, researcher Beemer said supermarkets need better ratings in the excellent category. "The fact that only 13.7% rate supermarkets as excellent on convenience means this is an Achilles' heel.
Shoppers want to get in and get out efficiently. This number needs to be 25% to 33%."
Shoppers gave good convenience ratings for supermarkets in a comparison with convenience stores over the past couple of years. Almost 40% said supermarkets had become better in offering convenience, while 20% said supermarkets were improving compared to convenience stores. That compares to about 40% who haven't noticed a relative change and only 1.2% who saw declining performance from supermarkets.
When the subject turned to supercenters, respondents proved themselves quite opinionated. Clearly they like this format. More than 56% said they would be more likely to shop a supermarket if it were attached to or combined with a discount store like a Wal-Mart or a Kmart. That compared to 36.4% who said they wouldn't and 7.3% who said they didn't know.
Asked if they already shop in these supercenter stores, which are gradually making their way across the country, 44.8% said they do, while 55.2% do not.
Shoppers also underlined the importance of the cross-shopping concept on which supercenters rely. Asked if they would shop both the food and general merchandise sides of the store during a supercenter shopping trip, About 68% said they would, vs. 24.4% who would not.
Moreover, 51.4% of shoppers acknowledged that if a supercenter opened near them, it would take away some of their current trips to their regular supermarket. That compared to 35.9% who said they would continue to visit the supermarket at the same frequency.
But for all their interest in supercenters, consumers don't want their regular supermarket to move closer to the supercenter model. More than 60% said they don't think their supermarket needs to add more general merchandise items to complement the food offerings. That compares to 33% who would like to see more general merchandise and 6.6% who said they don't have an answer.
Beemer said the answer is probably tied to convenience considerations. "They don't want their supermarket to become a supercenter. They don't want anything to offset their ability to get in and get out quickly. People worry they will get lost. Once they see a supercenter, they realize it's not so bad; the grocery section is set on its own."
Of those who want to see more general merchandise in supermarkets, they asked primarily for household goods (35.5%), health and beauty care items (19.4%), vitamins/supplements (17.3%), and over-the-counter remedies (13.9%).
