Americans still prefer in-store grocery shopping over buying online

American consumers still overwhelmingly prefer to buy groceries in stores rather than online, according to a survey sponsored by facilities management company Vixxo. Not surprisingly, the research also found that providing an exceptional in-store experience and high food quality are key drivers for keeping supermarket customers happy and loyal.

About 1,260 U.S. consumers were surveyed about their attitudes and buying preferences, and some of the results are as follows:

• 87% of consumers prefer to shop in person (including 96% of baby boomers and 81% of millennials)
• 84% of consumers said that they liked the ability to inspect and select their own products
• 60% of consumers said that they favor the atmosphere and experience of shopping in brick-and-mortar stores
• Approximately 25% of respondents said that they buy prepared food from their grocery stores
• 14% of consumers said that they shop in only one grocery store
• Millennials are three times more likely than any other age group to say that they enjoy the social interactions they experience in grocery stores

Grocery Outlet to open 40 new stores in 2019

Grocery Outlet, the California-based discount food retailer, has quietly ramped up its growth as competitors like Aldi and Lidl are making much more industry noise. Earlier this year the company opened its 300th store, and 40 new stores are expected for 2019.

Grocery Outlet, which purchased Amelia's stores in Greater Philadelphia a few years ago, operates stores in Pennsylvania, Oregon, Washington, Idaho, Nevada and California. Southern California represents their largest region, with 70 locations.

According to a recent story in Supermarket News, Grocery Outlet offers 40% - 70% off nationally recognized brands. They purchase from manufacturers that have excess inventory and pass their savings on to consumers. As a result of this opportunistic approach, the lineup of products often varies with each shopping trip. And since the stores are locally owned (not franchised), the product lineup may also vary from store to store. Each owner has the ability to choose what products they want to buy and sell.

"People love to save money, there's no question," said Phil Lempert, founder and editor of SupermarketGuru.com. "If you can combine that with a treasure hunt, from a consumer standpoint, it's great."

Although the products may differ from week to week, Grocery Outlet's inventory is predominantly made up of national brands, unlike Aldi and Lidl, who only offer a limited amount of national brands.

Recently Grocery Outlet has addressed its millennial customers, who are often their most vocal shoppers. Millennials seek both value and high quality, as well as an understanding of 'the experience of the food," according to Vice President of Marketing Layla Kasha. As a result, Kasha describes a new store in Los Angeles as "modern and hip, focusing on clean lines and a design aesthetic that matches the surrounding area."

Nationally, the model seems to be working, as Grocery Outlet recently surpassed $2 billion in annual sales, according to Supermarket News.

Study finds that most consumers still want to buy groceries in stores

According to a recent Forbes.com story, The Food Marketing Institute estimates that online grocery sales will reach $100 billion by 2025, or about 20% of the grocery retail market. Today it is estimated that 2.0% to 4.3% of industry sales originate online.

Amazon currently leads the way in the online grocery market, with an 18% share as of December 31, 2017.

However, a new study by Morning Consult revealed that a majority of Americans prefer the in-store shopping experience over online shopping when it comes to groceries. According to the study, 65% of consumers say they have no interest in buying food and beverages online, even when their options improve.

The study (conducted in May among 2,200 American consumers) also found the following:

• One-third of those surveyed had previously purchased food or beverage products online at least once. 
• Early-adopters of online grocery shopping consist of high-income shoppers ($100k+; 45% have purchased groceries online), GenXers (39%), middle-income shoppers ($50k - $100k at 38%), men (38%), millennials (38%), and urbanites (36%).
• Of the consumers who have ordered groceries online, 56% have only done so a few times per year.
• Of those shoppers that purchase groceries online on a weekly basis, middle-income shoppers are way ahead of those with high incomes. Affluent shoppers prefer to shop in physical stores for their weekly groceries. And since typical affluent households spend 75% more on food than the average shopper, the study describes them as store shoppers that really matter. These high-income consumers have remained loyal to shopping for groceries in person.

Based on the findings, Morning Consult stated that enhancing the in-store shopping experience is the bigger opportunity that food retailers are overlooking in their race to home delivery of online orders.

According to Morning Consult, "By trying to push more grocery sales online, retailers are depriving themselves of the opportunity to entice shoppers to spend more in-store through attractive displays, strategic merchandising, helpful and friendly personnel and mouth-watering sight, smell and taste experiences that can only be found in-store. Just go to any Wegmans to see how exciting and fun grocery shopping can be. This is where grocery stores can really clean up."

Study shows that online grocery shopping and meal kit purchases are increasing

A recent study by Valassis concluded that consumers are embracing new grocery shopping options like online ordering and delivery, and meal kits. Of 1,000 U.S. adults surveyed, 7% said they order groceries online weekly, but that increases to 14% for parents, 12% for millennials, and 15% for millennials with children.

In addition, 5% of all respondents said they order a meal kit online once a week, compared to 10% of parents, 10% of millennials, and 14% of millennials with kids.

Among those ordering groceries online, in-store pickup was a preferred option. Eight percent of all shoppers polled said they order groceries online and pick them up from their local store, compared to 17% of parents, 14% of millennials, and 20% of millennials with children.

"From home delivery services to the growing presence of organic items, emerging channels and trends are changing the way shoppers buy and, in turn, how brands reach and activate their target audiences," said Valassis Chief Marketing Officer Curtis Tingle.

The study also reported the following:

Thirty-three percent of all shoppers reported that they buy only or mostly organic and natural products, compared with 48% of parents, 50% of millennals, and 60% of millennials with kids.

Overall, 69% of the shoppers surveyed save money with print, digital media and/or loyalty cards.

FIfty-six percent of those surveyed said they use grocery, drug, mass and/or supercenter savings apps, up from 51% in 2017 and 38% in 2016.

Survey says millennials shop for groceries differently than the rest of us

According to a recent survey by the International Council of Shopping Centers, 99 percent of adults in the U.S. buy some or all of their groceries in person. Those surveyed cited immediate access to products and the ability to select fresh meat, dairy and produce as the top reasons.

The survey also revealed that 93 percent of adults shop for groceries at discount department stores (Walmart, Target), and 92 percent shop at traditional supermarkets . Sixty-nine percent of the people surveyed said they shop at limited assortment food stores (Aldi, Trader Joe's) and warehouse clubs.

Millennials revealed different shopping behaviors from all others. Seventy-four percent of them buy groceries from convenience stores, 67 percent from Amazon or other online retailers, and 66 percent from high-end supermarkets. Even when buying online, 81% of millennials go to the store to pick up their groceries.

Study concludes that food retailers should focus on families, not e-commerce or millennials

A study on food and beverage buying released earlier this month by Tabs Analytics concluded that food retailers should slow their investments in e-commerce and on millennials, and focus instead on old-fashioned promotional spending at stores and on marketing to households with children.

The study included 1,000 geographically and demographically dispersed consumers between 18 and 75, and analyzed 15 consumables categories.

According to the study, only 20% of millennials are heavy buyers of food and consumables, and only 4.5% of all shoppers use the Internet to purchase groceries six or more times per year.

"The study underscores that online grocery is failing," said Tabs CEO Kurt Jetta. "For the fourth year in a row, consumers have turned their backs on buying groceries online no matter how much online grocery retailers try to entice them."

In addition, since the study showed that millennials use grocery store circulars significantly less than the overall study average (30% compared to 42%), Jetta said retailers should focus their marketing on households with children, as they are heavy buyers of food and beverages, and much more likely to respond to promotions.