For grocery retailers, a key consideration is that pricing perceptions influence not only the items shoppers add to their cart but also where they decide to shop in the first place.
That has real implications for grocery retailers, particularly conventional grocers, suggests Parker. Will the consumers who were willing to go around—to, say, clubs, discounters or mass merchandisers—in search of lower prices storewide—come back around to their neighborhood grocer and its highly-invested-in fresh department as inflation cools?
It’s a question that traditional grocers shouldn’t wait around to find an answer for, Parker advises.
Successful grocers in 2023 will resonate with diverse audiences by speaking to their wide-ranging interests and needs, she said. In practice, that might look like broadening the assortment of fresh-perimeter items offered on promotion, taking care to ensure that—for example—each protein subcategory (beef, pork, etc.) is represented in promotional pricing week to week.
A more-mindful approach to pricing and promotion can help a retailer avoid being viewed by consumers as a one-trick pony—unoriginal, unchanging and undifferentiated vs. others in its grocery tier. After all, not every budget-conscious consumer is hunting for a bargain on ground beef each week; health-seekers don’t buy dairy alternatives only in January; and parents of young children don’t crave deals on lunchbox-ready produce only in August. Winning in fresh means speaking to consumers’ varied needs throughout the year and recognizing that consumers need to perceive overall value—not just an absolute low price on a couple of high-frequency items—to make a retailer a regular destination with local shoppers.