Consumers expect to spend more on groceries this year, but not split their dollars between distribution channels much differently than in the past year.
And price continues to be a key factor in why consumers shop where they do.
In the results of a national consumer survey conducted exclusively for Supermarket News by America's Research Group, Charleston, S.C., 34.6% of those polled said they expect to spend more on groceries overall during the coming year, while 59.3% expect to spend the same.
Significantly, noted Britt Beemer, chairman of the research firm, only 6.1% expect to spend less. In consumer research, he said, "if the 'more' response is five times greater than the 'less,' you have a real trend."
Since the percentage of shoppers who expect to spend about the same is so high, however, "overall there will be an improvement in dollars spent on food and groceries this year, but the trend won't be up a lot," Beemer said.
As for two of the supermarket industry's hot topics, the survey showed a marked jump in consumer awareness and use of preferred-shopper cards, and a decided reluctance to use computers for shopping from home, no matter how easy it is.
This year's results also indicate more dollars going for groceries when compared to similar consumer surveys the past two years. In 1995, 25.2% said they expected to spend less on groceries in the coming year; in 1996, that figure was 24.6%. This year's figure of only 6.1% expecting to spend less is a sharp drop.
While a change in family size remains the primary reason consumers expect to spend more on food, with 44.2% picking that reason, the second reason is a change in income, picked by 28.3% of the respondents.
"Because of pressures in the economy for higher wages, people made a little more money last year," said Beemer. "And there's speculation wages will go up a little again this year. The food industry benefits from that," said Beemer.
While consumers expect to spend more money on food, they have few plans to change where they shop.
Consumers were asked if they are buying more or less food from a distribution channel than a year ago and if they expect to buy more or less in the coming year from a given distribution channel. In most cases, about two-thirds of the consumers answered they are buying the same amount from a given channel and plan to buy the same amount from that channel in the future. Consumers were asked about supermarkets, drug stores, warehouse clubs, convenience stores, discount stores and fresh meat markets.
The "same" response is a change from past surveys, when generally only one-third to one-half the consumers answered "same" instead of "more" or "less."
This year, 63.8% of the consumers surveyed said they are buying about the same amount from supermarkets as last year; 26.9% are buying more, 9.3%, less.
In 1996, only 34.1% were buying the same amount from supermarkets; 43% were buying more, and 22.9%, less.
In the 1995 survey, 32.5% were buying the same amount; 41.2% more and 26.3% less.
Similarly, asked if they expect to buy more or less food from supermarkets during the next year, 67.2% answered they expect to buy the same amount; 26.5% expect to buy more; 6.3% less.
In past years, only about half the shoppers expected to buy the same amount in the coming year, and the percentages expecting to buy less from supermarkets were much higher -- 9.4% in 1996 and 22.8% in 1995.
For the other channels of trade, about two-thirds of the respondents said they are spending and expect to spend the same on food in those stores. For example, 67.7% said they are buying the same amount from warehouse clubs as they did a year ago; 15.5% are buying more, 16.8% less. It's a big change from the 1996 survey, when only 36.9% of the shoppers were buying the same amount as the previous year from the clubs, while 23.8% said they were buying more and 39.3%, less.
For discount chain superstores, 62.3% are buying the same amount there as a year ago; 15.9% are buying more; 21.8% less. A year ago, about a third of the shoppers were buying the same amount in discount superstores; a third, more, and a third, less.
Using the "five times greater" rule of thumb, convenience stores are likely to decline as a source of groceries. While 57.4% of the shoppers expect to buy about the same from convenience stores in the next year, 38.2% expect to buy less and only 4.4% expect to buy more.
Beemer noted these findings bear out other research the firm has done.
"Our research is showing Americans have stabilized in almost all categories. Overall, you don't see consumers today shopping as much," he said.
"There's a sea of change in America's attitude toward shopping. It's no longer 'shop 'til you drop.' On the bigger items, if the price is more than they want to spend, they realize they don't have to buy it. They will delay indefinitely a buying decision."
Time pressures are also a major consumer concern, he said.
"There are two groups of consumers. One tries to find the most incredible deals. For the other, saving time is more important than saving money," he noted. For supermarkets, that means the second group shops primarily at one store, with occasional visits to a second supermarket or warehouse club.
Price continues to be a driving force in consumers' decisions where to shop.
Asked what is most important about the ideal grocery store, consumers most frequently answered everyday low prices, 31% of responses. Great weekly specials was the choice of 10.2%, giving price a 41.2% total. Convenient location was the key for 22.8% of shoppers, and fast checkout was ideal for 13.5%.
Supermarket shoppers' loyalty to their stores is tenuous. Asked if they would consider changing where they shop for food if their satisfaction was enhanced, 56% said yes; 35.1% said no.
What would be the most likely reason for such a change? Overall low prices was the leading reason, with 33.9% of the responses, followed by location, 17.9%; good specials, 15.7%; and wider selection, 13%.
"Price continues to be the tie breaker" when consumers are choosing where to shop, Beemer said.
But, he added, "low price is not enough. Everybody wants to be low price. Supermarkets have to stand for something."
Preferred- or frequent-shopper cards have become a major marketing tool and have jumped enormously in consumer awareness. Almost half, 49.9%, of the shoppers surveyed this year have a preferred-shopper card, and 89.8% of those answered yes when asked if they are getting good savings from the card and making special purchases in order to get discounts.
While this was the first year shoppers were asked if they had such a card, in last year's survey, consumers were asked if their supermarket offered a card-based frequent-shopper program, and only 20.4% said yes.
"In a year, we went from 20% saying their chain had cards to 50% saying they have one," Beemer said.
And the fact that 90% of the cardholders are using them is extraordinary, Beemer pointed out. "Any time something is over 70%, that is a home-run concept."
Shopping via home computer was on the opposite end of the consumer popularity scale.
The question was: "If it were easy to do grocery shopping via a home computer, would you conduct some of your food purchases in that manner?"
A whopping 74.1% answered no. Only 15.8% said yes; 10.1% weren't sure. Food shopping by computer was unpopular regardless of gender -- about 74% of both men and women surveyed said no.
"The No. 1 objection we hear is a reluctance to have somebody else pick out products that affect a family's health," commented Beemer.
America's Research Group surveyed 1,000 consumers across the country in late February for the study, which has a 4.3% margin of error. Just over half the respondents were women, 47.7% were men.
A large proportion of shoppers said they are keeping to the same food-spending pattern at various retail channels as compared with a year ago.
Drug Stores 62.3%
Membership Warehouses 76.7%
Convenience Stores 60.1%
Discount Stores 62.3%
Money Still Talks
Shoppers listed everyday low price and great weekly specials as two of the top four characteristics in their ideal food/grocery store.
What do shoppers look for in a food store?
Everyday Low Price 31%
Convenient Location 22.8%
Fast Checkouts other 22.5%
Great Weekly Specials 13.5% 10.2% (pie chart)
Would you use a computer to do your food shopping?
It Doesn't Compute
The vast majority of shoppers said they wouldn't want to make food purchases via a home computer, even if it were easy.