• by Jack Loechner , Staff Writer @mp_research, March 9, 2015

According to a survey by Ipsos among a representative sample of US primary grocery shoppers to understand shopper behavior, shopping for groceries at only one store is the exception rather than the rule. When shoppers have more than one store in their repertoire set, the stores are likely to be complementary (different stores are viewed as stronger in certain categories) rather than substitutable (competing based on price).

While the consumer generally gravitates towards what is simple and efficient, there is mounting evidence that shoppers are moving in the opposite direction when it comes to grocery shopping: they are more likely to shop at more than one store. Multiple stores as a matter of fact, says the report presented by Colin Ho and Junmeng Chen.  

Fresh foods such as meat and vegetables, while non-glamorous in the world of market research, are key “destination” products that determine whether a shopper will go to a particular store. There is also evidence that consumers shop at different types of stores in their repertoire set in a predictable sequence. These findings have important implications for retailers and also for the manufacturers that distribute products through them.

To lay the foundation for the findings in this study, the report examines the number of grocery stores where people shop, and finds that only a quarter of the population shops at one grocery store. In other words, shoppers who shop at only one grocery store are in the minority. 45% of grocery shoppers shop at two or three grocery stores and the remaining 30% shop at four or more stores for groceries.

The report says that not all stores are equally “susceptible” to this multi-store phenomenon. There are some retailers that are more likely to be the only store that a consumer shops at for groceries. The traditional grocery stores vary in their level of exclusivity, defined as being the only store that a consumer shops at for groceries. Stop and Shop, for example, has a higher “exclusivity” score than “Giant”. Understanding why some stores are better at fulfilling all of a shoppers’ needs than others will help retailers compete better. Of course, what contributes to a retailer’s exclusivity may also be due to a geographic location that has fewer competitors, acknowledges the report.

Club Stores (e.g., Costco), Deep Discount Stores (e.g., Aldi), Specialty stores (e.g., Trader’s Joe) and Drug Stores (Walgreens) are all low in exclusivity. So, while these more specialized store formats have taken away sales from traditional grocery stores, the findings here show that these specialized stores are by no means used as primary grocery stores.

The finding that people shop at more than one store for their groceries has been found in other studies as well. What is not as clear, however, are the reasons people are shopping at more than one store. Is it because shoppers are simply “jumping” from store to store because of promotions and differences in pricing, or is there something more to it than just simple price comparisons?

The study finds that shoppers are viewing each store in their repertoire as complementary. Certain purchases are clustered at certain stores. For example, shoppers are more likely to purchase coffee and water from Club Stores like Costco and Sam’s Club. Shoppers are more likely to purchase wine from Trader Joe’s, and bakery items from Whole Foods. The findings from this analysis suggest that shoppers are shopping at multiple stores because they perceive some stores as better at some categories. Presumably, the larger packs of bottled water and coffee that Club Stores sell are a better value for consumers as these are food items consumed regularly and, hence, used up quickly. The usage of cage-free eggs, natural butters and unbleached flour in Whole Foods bakeries creates an offering that is unique to Whole Foods and, presumably, superior in quality.

There is evidence that the stores in a shopper’s repertoire are complementary and not simply substitutes, says the report. To the extent that stores are complementary then a retailer may need to shift from a share of customers’ perspective to a share of wallet perspective. If different stores are specialized in different categories, then one possible strategy is to maximize shares in the categories where the stores show relative strength.

And, price does appear to be part of the picture as well. There are Regional Grocery Stores and there are clusterings that consist of only Nationwide Grocery Stores and Mass. So, while stores in a shopper’s repertoire set are complementary, there is also a hint that some shoppers have more than one Nationwide/Regional Grocery Store in their repertoire set and they buy from whichever store offers the best price.

There is a clear pattern, says the report, that pricing plays a role in consumers’ shopping repertoire as well. If a shopper shops at Dollar Tree or Dollar General or Aldi for groceries, their probability of also shopping at Walmart is 60% or greater. These four retailers are all known for their low prices. Clearly, price plays a role in a shopper’s repertoire set .

The sequence in which shoppers go through the stores in their repertoire set also seems to be predictable. From the data, in general, shoppers are more likely to start their grocery shopping with a National grocery retailer, a Regional retailer or a Mass Merchandiser retailer. Deep Discounts, Clubs and Specialties tend to be shopped at later.

So, while Deep Discount stores, Club and Specialties are chipping away at the National/Regional/ Mass grocery stores, it appears that there is still a possibility to bring back those “lost” sales, concludes the report. From a Club Store, Specialty and Deep Discount retailer perspective, the question is how these more specialized retailers can bring shoppers in to start shopping at their stores first in order to maximize their basket.

For more about this study with regards to shopping sequence, week of the day preferred for each type of retailer, the size and contents of “baskets,” and items most frequently bought, please visit the complete report with charts and graphs in PDF format.

Please visit here for the report.