Consumer shopping patterns changing: fewer trips, larger baskets

Posted by Daniel Palmer on 8th September 2008

American consumers are balancing the need to save money on consumer packaged goods with the need to conserve petrol, so they are turning to major shopping centres to make fewer and larger shopping trips.

Information Resources, Inc.’s (IRI) latest research, ‘Times & Trends: Channel Migration 2008’, reveals that shopping centres were the only store type to achieve sales gains across six key grocery retail department areas during the last year, while traditional grocery retailers showed declines in four of six departments. Furthermore, shopping centres (supercentres) exhibited gains with all income levels and with three high-potential market segments, including baby boomers and households with children.

How to respond to such growth poses a conundrum for all other store types. According to IRI, some will try to “out-super” the supercentres by expanding assortments and lowering prices, while others will begin providing a more premium experience to attract higher-income shoppers. The other option anticipated to be common is to stay with current market strategies and wait until better times return.

“Leaders throughout the retail spectrum know there is not one single answer to this retail challenge, and that securing the best information is the first step to developing an optimal new strategy,” notes IRI President of Innovation and Consulting Thom Blischok.

Other findings of the IRI study included:

* The grocery channel has lost ground across fresh/perishable, frozen and centre store, including high-demand meal ingredient and meal component categories
* Cross-channel competition has intensified for self-care products, which are experiencing rapid demand increases; drug stores and supercenters have secured the largest gains, but channel shifts vary by category

Mr Blischok isn’t convinced about the ‘wait and see’ option used by some retailers, as he believes the new shopping patterns could last beyond the downturn. “With the economy not expected to rebound until at least the second quarter of 2009, there is ample time for consumers to become comfortable with their new shopping patterns, suggesting that these changes and the competitive ramifications could have some staying power,” he advised.

Beyond the potential gains by retailers in shopping centres, other winners out of such a trend could be convenience-store operators who could gain in their foodservice sector. With consumers wanting to make fewer trips the prospect of purchasing food when they fill up with petrol becomes more alluring. Additionally, more consumers may seek out convenience stores within walking distance of their house to make extra purchases as they realise that, because only a few products are needed, a quick trip to a c-store may put off a larger shopping trip for a few days.