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A Matter of Choice. What Drives Grocery Store Visits

US grocery shopper online survey from Minerva Insights & Solutions reveals that while Walmart sees 50% of US shoppers coming through its doors, their satisfaction levels are significantly less than most grocery retail competitors, especially Trader Joe's, Costco and Aldi.
Fresh perishables is the most important store choice driver

More than 1000 primary decision makers for grocery shopping took part in a US nationwide, census-matched online survey at the end of May 2018, answering questions about

  • What grocery stores they shop the most?

  • What drives their store choice?

  • How satisfied/dissatisfied they are with their preferred grocery retailer?

  • What their grocery retailer still needs to improve on?

  • What lifestyle or innovative, new products they are buying or are interested in buying?


Keeping your primary shoppers loyal requires "The Right Company Values", "Fresh Perishables", "In-Stock Products", "High Quality & Gourmet Foods", "Staff Service", "Everyday Low Prices" and a "Wide Assortment". "On-line Order, Pick Up Convenience" is not (yet) a store choice driver.”

Please find below some of the key results of this online survey. For further information or interest in full or customized survey results, please send an e-mail to info@isminerva.com.


Store Choice Drivers


Online Survey n=1005 US primary grocery shoppers: STATED IMPORTANCE: "How important are the following points in your choice of grocery store?"; DERIVED IMPORTANCE: Correlation between overall satisfaction rating with primary store and satisfaction rating for specific store choice driver

"Fresh Perishables", "Everyday Low Prices", "Convenient Location", "In-Stock Products" and "Wide Assortment" are rated by primary grocery shoppers as the most important factors - stated importance - in their choice of grocery store. Also considered highly important are "Quick Check-Out", "Staff Friendliness & Service", "Right Company Values", "Store Brands", "Promotions", "Healthy/Organic range" and "High Quality & Gourmet Foods".


Looking at the statistical correlation between overall satisfaction with primary store choice and satisfaction with store choice drivers, we obtain derived importance. When combined with stated importance (see above graph), we can conclude following:

  • "Convenient Location" is a necessary driver. You are out of the game without it but it also does not add any additional incentive for choosing your store let alone staying loyal to it.

  • "Fresh Perishables", "Everyday Low Prices", "Products in Stock", "Wide Assortment", "Staff Service" and "Right Company Values" are the core drivers of store choice and store loyalty.

  • Immediate opportunities to drive store choice/loyalty lie with "Quick Check-Out", "High Quality & Gourmet Foods", "Promotions", "Store Brands", Healthy/Organic Foods" and "Innovative New Products".

  • "Loyalty card advantages", "Product Tasting, Events In-Store", "On-Line Order, Pick-Up Convenience" and "In-Store Eating Space" are less relevant or still to be developed further overall.


Innovative, New Products

In the same survey, 40 different lifestyle themes or innovative, new product series were tested on current purchase (Bought Last Month: LM) and purchase interest (Interested).

Online Survey n=1005 US primary grocery shoppers: "In the past 30 days, which of the following foods & drinks did you purchase at least once? (BOUGHT LM) and "Which of the following foods & drinks are you interested in trying? (INTERESTED)
  • The findings confirm a few well established large lifestyle product themes such as "locally grown products", convenience solutions such as "RTC, RTH meals"and health/sustainability focused "organic foods" - all between 40% and 60% on combined purchase + interest.

  • These are followed by a few product series that have earned a place in the US shopping basket (above 40% purchase +interest) such as "Greek Yogurt", "Hummus" and "Fruit & Nut bars".

  • Further down the list, we see several product series with a clear upside based on the level of interest show in buying these products. These include "low sugar foods", "ancient grain foods", "vegetable chips", "vegetable based pasta", "superfoods", "probiotics foods & drinks", rice-shaped cauliflower, broccoli", "European artisan breads", "sustainable seafood", "meal kits" and "cold-pressed juice".

  • Other innovative product themes such as "meatless burger", "Icelandic yogurt", "poke bowl", "Aussie style yogurt" and "bamboo water" show potential but are still at early stages of widespread acceptance and distribution.


Primary, secondary grocery store choice

As the title of the blog suggests, Walmart reigns supreme among US primary household shopper grocery store choice with 50% claiming to have shopped there in the last 30 days.


The top 10 of stores recently shopped looks as follows:

  1. Walmart: 50% shopped last 30 days; 17% primary and 19% secondary store choice

  2. Target: 29% shopped last 30 days; 2% primary choice and 6% secondary store choice

  3. Kroger banner: 26% shopped last 30 days; 13% primary and 8% secondary store choice

  4. Costco: 23% shopped last 30 days; 3% primary and 7% secondary store choice

  5. Trader Joe's: 23% shopped last 30 days; 4% primary and 7% secondary store choice

  6. Aldi: 20% shopped last 30 days; 6% primary and 4% secondary store choice

  7. Whole Foods: 17% shopped last 30 days; 3% primary and 4% secondary store choice

  8. Safeway: 14% shopped last 30 days; 4% primary and 4% secondary store choice

  9. Publix: 13% shopped last 30 days; 5% primary and 4% secondary store choice

  10. Albertson's: 9% shopped last 30 days; 2% primary and 2% secondary store choice

Needless to say that HEB, Wegmans, Meijer, Ahold banners as regional operators fell out of the overall nationwide top rank.


Overall Satisfaction with Primary Store Choice

A different top 10 occurs when looking at overall satisfaction scores (Top 2 Box Extremely Satisfied % + Very Satisfied %) from among primary store choice shoppers. Walmart does not rank among its top 10, neither does Whole Foods or Target (more on that later).

  1. Trader Joe's: 93%

  2. Costco: 90%

  3. Aldi: 85%

  4. Publix: 83%

  5. HEB: 79%

  6. Wegmans: 79%

  7. Meijer: 78%

  8. Kroger: 71%

  9. Winco: 68%

  10. Albertson's: 66%

Top performers by store choice driver

No surprises to see the same retail banner names regularly come up in the top 3 ranks for each of the store choice drivers:


Points for Improvement

Across all retailers, most often spontaneously stated points for improvement are "Price" (20%), "Product Selection" (16%), "Check-outs" (7%) and "Products in Stock" (7%).


So why do 50% of US households shop at Walmart?

Despite not featuring among the top 3 performing retailers on "Everyday low prices" in this survey (No 4 in fact), it is common knowledge among US households that Walmart will always provide a very competitive price and/or price match its key competitors. It further gets recognition for its convenient locations - in other words nationwide store network -, its store brands and its wide product offer. Shopper pain points are check-outs, products not being in-stock and staff friendliness/service.


Selected grocery retailer scorecards

Hard to argue with a company that has had so many consecutive quarters of profit, Kroger performs above average on most store drivers with specific call-outs for its loyalty card program, store brands and wide assortment. "Price" however is a pain-point called out spontaneously by 1 in 4 shoppers followed by "Product Selection" and surprisingly also "Organic".

Costco scores very well on the two core drivers "Competitive Prices"and "Fresh Perishables". In addition, its limited assortment enables it to keep "products in-stock" and "product tastings" do get recognized by its loyal shoppers. Surprisingly its Kirkland store brand program stayed somewhat under the radar (because it offers only one tier, not sure why?). Points for improvement mentioned by its shoppers include "assortment - product selection", "product size", "in-stock products" and "check-outs".


Trader Joe's offers a unique shopping experience that provides for a loyal shopper clientele. "Staff Friendliness and Service", "Everyday low prices", "Right Company Values", "Store Brands Selection", "Healthy/Organic Products, the list goes on. Points for improvement are "Product selection", "Produce" and "Vicinity" indicating a strong upside in rolling out more stores across the country.


Price, price, price is the only thing that needs changing at Whole Foods, as stated as a pain point by more than half of its shoppers. A critical issue keeping it overall out of the top 10 on overall store satisfaction. Let's see how far Amazon will be able to get it down that road without compromising its unique character and strengths. Besides Trader Joe's, Whole Foods is the only retailer scoring top 3 across eight store choice drivers with "Healthy/Organic Range" its stand-out characteristic...only make it more affordable now.


Last but not least Aldi - a very dangerous specimen that started out by taking full ownership of likely the most critical store driver of them all - "Everyday Low Prices". Not for every shopper profile out there but its latest store format opened near its US headquarters in Batavia makes clear strides towards larger stores - more product selection, adding more and better fresh offerings as well as building out its store brand lifestyle solutions. All of this has appeal to a wider shopper profile. As they evolve and expand, they still need to improve its check-outs and products availability while trying to stay very close to its cost-efficient operational model.


Conclusions

Store formats such as Aldi, Trader Joe's and Costco address key US grocery shopper store choice drivers and will continue their store network expansion. Regional grocery retail operators need to make sure they excel at similar store choice drivers such as those mastered by the likes of Publix, Wegmans and HEB.

Walmart and Kroger benefit from their large store network and scale to offer highly competitive prices and a wide assortment. They will also have to evolve so as not to lose ground against the upcoming competitors from the limited assortment/discount formats on the one hand and premium regional players on the other hand. While another battle looms to gain online grocery shoppers, at least this survey indicates it is not as much in play just yet.

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