Shoppers Buy Just 51% Of Food In Grocery Stores

by Sarah Mahoney, Aug 26, 2011, 1:48 PM

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While consumers say they still love their supermarkets, a new study shows they are spending less money there, with grocery stores now accounting for about 51% of food dollars.

The report from AlixPartners, a global business advisory firm, found that while shoppers are value-conscious, they still say food quality -- especially perishables -- and store atmosphere are just as important to them as prices. About 70% of consumers are making trips to buy groceries once a week, with 50% planning to spend more on food in the year ahead, and 39% expecting to spend roughly the same as they did this year.

Sales and promotions, however, are key factors, with 79% of the survey saying they take coupons into consideration when drawing up their shopping lists, and 86% saying they use a shopping list at least sometimes. But they are highly likely to deviate from the list once they are behind the grocery cart, with 93% saying that product displays and signage -- which often point them toward sale items -- can influence them to pick up items not on their list. And 79% say in-store sampling can change their mind, too.

Grocery chains continue to lose ground, the study finds: While grocery stores still account for 51% of grocery spending by those in the survey, mass merchandisers -- including Walmart and Target -- now get 30%, and club stores 13%. And the Internet is capturing 2% of shoppers' grocery dollars.

When shoppers were asked to name and rank their preferred grocery retailers, nearly half of consumers surveyed (47%) named Walmart either first, second or third on their list of favorite places to shop for groceries, followed by Target and Kroger (with 16% each), Costco (14%) and Publix (11%).

Lowest-income shoppers are even less likely to use traditional grocery stores, buying just 45% of their groceries there, and 38% at mass merchandisers. Among higher-income shoppers (with incomes of $100,000 or higher), 56% is spent at grocery stores, with club store sales rising to 17%.

Loyalty cards and other programs remain an effective tool for grocers, the survey found, with participants buying "20 to 30 times the amount purchased by the occasional or new shopper," it says.

The survey is based on responses from 1,000 U.S. adults.

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