As price-wary consumers engage in more "cherry picking" behavior and buy what they need, grocers can invite them to explore other products in an attractive department.
As grocers seek to solve the price-value equation among today’s discerning consumers, they can mine and leverage data showing that consumers are making a variety of adjustments. For example, according to information from Circana (formerly NPD and IRI), shoppers are patronizing stores more often to find deals, but scaling back in volume and opting for affordable essentials and indulgences.
Jonna Parker, Circana principal and fresh foods team lead, recently spoke with Progressive Grocer about some of the behaviors in the fresh perimeter and how retailers can meet the needs of today’s shoppers by optimizing pricing and promotions. Although stubborn inflation has spurred many changes, Parker emphasized some “glass half full” takeaways. “The average American household is making more trips for food and beverage over the last year, even as 9 out of 10 have complained about price for the last 18 months,” she pointed out.
What is different and notable is the intent of those more frequent trips. “The way we are shopping is a ‘just in time’ way of shopping. We are seeing more frequent trips with the average basket size down. It’s about someone who goes in and buys just what they need and are very cognizant about what they need,” Parker explained.
Accordingly, pantry loading is down from pandemic highs and shoppers are shifting their habits in the fresh department, too. For instance, instead of buying a whole bag of russet potatoes, a shopper will go in and buy two, three or four to meet their household need that day or week. Circana found that in produce, meat and dairy categories, a quarter of all baskets have 10 or fewer items.
That said, consumers are highly engaged with produce even as they are weighing purchases more carefully. “Produce owns 8 of the 10 most engaging categories as of the summer of 2023. You are seeing wide swaths of people engaged with produce in multiple categories on a more frequent basis,” Parker noted.
To garner more sales from these engaged consumers, she added, retailers can take a fresh look at their assortment, pricing and promotions. In produce, this means heeding consumers’ penchant for buying what they need and responding to the situation- and occasion-based mindset. The success of smaller portions of tiny potatoes that cook up quickly and sell for a competitive price point underscores that point.
As consumers browse more channels in a splintered marketplace, traditional grocers can spotlight competitive pricing on core items and take other steps to distinguish their offerings. “I think the holidays are a tremendous opportunity to showcase other things. Produce has 8 out of 10 or 15 out of the top 20 most purchased items for the holidays, so if you have someone coming it to get onions and celery for stuffing, you can do some creative signage,” Parker said, noting that it's a good time to capitalize on assortment variety.
She underlined the need to drive incremental sales lift by opening up shoppers to more and different items while they are in the store. “There is so much the retailer has to offer during the quick trips,” she added.