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Consumer trends favor niche food retail: Study

Changing consumer lifestyle and consumption habits — combined with trends toward a rising middle class, more urbanization and growing Millennial spending power— are driving a structural shift in retail growth strategies favoring niche retailers, and challenging those focused on the mass market, according to a report to be published Wednesday by Nielsen.

Jon Springer, Executive Editor

June 15, 2016

2 Min Read
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Changing consumer lifestyle and consumption habits — combined with trends toward a rising middle class, more urbanization and growing Millennial spending power— are driving a structural shift in retail growth strategies favoring niche retailers, and challenging those focused on the mass market, according to a report to be published Wednesday by Nielsen.

The report, entitled "Think Smaller for Big Growth" argues that shoppers worldwide view food shopping as chore, but a proliferation of niche shopping choices has allowed shoppers match their preferred store format more precisely to their shopping needs.

"For many big-box retailers the shift hasn't been such a boon," the report said. "The result is that today's retail environment is more fragmented than ever. Fierce competition for shoppers has led to an increasing dependency on promotions among large retailers."

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The survey was based on respondents in 61 countries.

While U.S. consumers are less sensitive to rising food prices than counterparts elsewhere in the world, their tastes are favoring growth for discount store models and natural/gourmet chains, Nielsen argued. Niche retailers are grabbing share from mainstream supermarkets, with discount stores projected to grow by 2.6% annually between 2015 and 2020 and natural/gourmet stores projected at 6.8% annual growth over the same period.

The report asserts that U.S. shoppers view factors like quality produce, product availability and convenience of location as more influential than price in and of itself, Nielsen added. Consumers are also increasingly looking for meals over ingredients, and for stores to serve health and wellness needs.

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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