Viewpoints

Rating Food Store Formats According to Value

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A new consumer poll reveals surprisingly good news for supermarkets — so unexpected, in fact, that retailers had no clue.

In the midst of this sour economy, a national panel of consumers was just asked: “Which type of store are you shopping at more so now than in the past in order to get the best deal?”

Despite all the talk of competition from discount formats, chain grocery stores drew the biggest share of responses, 26.4%. That was followed by 22.9% for big-box retailers (defined as Wal-Mart, Target, Meijer, etc.), 14.7% for warehouse club stores, 11.2% for extreme-value limited assortment stores, 9.7% for independent grocery stores, 9.2% for natural/specialty food stores, and 4.5% for dollar stores.

This question was part of a larger survey conducted for SN (see the Shopper Marketing supplement in the print issue) by Supermarket Guru Phil Lempert, who is SN contributing editor. The surprise here is that chain grocers far outperformed discount stores on a value-related topic. Some in the industry might say they aren't surprised by these findings, and that retailers won't be either. But we have proof to the contrary.

We asked the same question to the food industry to gauge how accurately retailers would predict shopper responses. Here's how we put the question: “What type of stores are shoppers shopping at more so now than in the past in order to get the best deal?”

Retailers were far off the mark compared to the responses of shoppers. Retailers gave the edge to big-box retailers, 48.8%, followed by dollar stores, 40.2%, warehouse club stores, 25.6%, extreme-value limited assortment stores, 23.2%, independent grocery stores, 9.8%, and, finally, chain grocery stores, 6.1%. How could the retailer-shopper disparity be so wide?

Retailers may be overly focused on competitive formats to the point of missing the consumer's positive images of supermarkets, which are enhanced by aggressive deals, extensive private-label programs, and a one-stop-shopping format that helps customers avoid extra car travel at a time of high gas prices.

Meanwhile, grocers probably underestimate the importance of their own continued role as the consumer's primary shopping venue, and they certainly have an opportunity to further leverage that advantage.

Here's the point: Many consumers like the value they see at supermarkets, so it's time that grocers themselves value it more highly.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Carol Angrisani

Carol Angrisani is an associate editor at Supermarket News. Along with covering the packaged goods beat, she also manages SN’s annual private-label and ethnic marketing supplements. Carol...
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In their Viewpoints columns, SN editors give their perspectives on current industry issues.

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