exploring the western and midwest grocery shopper care services personal care products ... arrows...

© Kantar Retail 2016

Exploring the Western and Midwest Grocery Shopper

Diana Sheehan, Director

October 2016

Regional Grocery Forum – West


3

Today’s Agenda

The Shopper State of Mind

The Western and Midwest Grocery Shopper:

Who, What, and Where


Digging Deeper


Note about Hispanic Shoppers: Hispanic shoppers are the survey respondents who self-identify as being of Spanish origin; because the ShopperScape® survey is administered only in English, the ShopperScape® sample of Hispanic shoppers should be considered as representative of only acculturated Hispanics.

4

Data Source: About the ShopperScape® Survey

Who?

‒ 4,000 primary household shoppers per month

‒ Representative sample of ~50,000 unique primary household U.S. shoppers annually; 80:20 female:male ratio

‒ Fielded online the third week of every month

‒ Survey fielded through LSR access panel

How and When?

‒ 200+ retailers across all sectors of retail

‒ 81+ category groups (e.g., candy/gum, non-carbonated beverages; women’s casual clothing)

‒ 7 major departments (e.g., food/groceries)

CoverageWhat?

‒ Monthly and quarterly tracking questions on retailers and venues shopped, products purchased, where spend the most, near-term spending outlook, and household financial health

‒ New questions each month on timely, topical, and seasonal issues (including key holiday periods) affecting shopping behavior


5

‒ Haves/Have Nots: Segmentation based on the point at which 60% of U.S. households fall into the

“Have Not” category (and represent 25% of all income earned in the United States) and 40% of U.S.

households fall into the “Have” category (and account for 75% of all income earned in the United

States). When applied to ShopperScape® data, that dividing line falls at an annual household income of

$60k

‒ Generations

Gen Y: Born 1982 to 2002 (note: ShopperScape® surveys heads of household 18+, so Gen Y respondents in

ShopperScape® are 19 to 33 years old in 2015)

Gen X: Born 1965 to 1981 (34 to 50 years old in 2015)

Boomers: Born 1946 to 1964 (51 to 69 years old in 2015)

Seniors: Born in 1945 or earlier (70 or older in 2015)

‒ West and Midwest Geographic Regions, Based on U.S. Census Region Definitions

Midwest: North Dakota, South Dakota, Nebraska, Kansas, Missouri, Iowa, Minnesota, Wisconsin, Illinois, Michigan,

Ohio

West South Central: Texas, Oklahoma, Arkansas, Louisiana

West: Washington, Oregon, California, Nevada, Arizona, New Mexico, Utah, Colorado, Wyoming, Idaho, Montana

‒ Shoppers: Shoppers of specific retailers are defined as those who shopped the retailer, in stores or

online, in any past four-week period, unless otherwise indicated

Data Definitions

Income Segments, Generational Cohorts, Geographic Regions, Shoppers

© Kantar Retail 2016© Kantar Retail 2016

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The Shopper State of Mind


Haves Have Nots

24% 30%

23% 29%

18% 31%

18% 31%

13% 30%

12% 24%

14% 23%

13% 24%

14% 15%

11% 16%

8% 11%

8% 11%

6% 12%

Uncertainty and the Unexpected Are Top Concerns

Arrows indicate significant difference vs. all shoppers (95% confidence level)Source: Kantar Retail ShopperScape®, February/April/May/June 2016

7

9%

10%

10%

14%

14%

19%

19%

20%

23%

25%

26%

26%

27%

Getting enough hours at work

Not enough time with my family due to work

Losing my job

Getting sick and having to miss work

Decreased value of investments/savings

Getting sick and cannot afford medical bills

Not being able to pay down debt

Not having enough money to treat myself/my family

Not having enough money to pay my bills

Income not keeping up w/higher food/HH prices

Unexpected expense

Paying higher health insurance costs

November elections resulting in changes togovernment programs that will negatively affect me

All Shoppers

Economic Concerns(share of all shoppers “extremely worried” about factor affecting them in the next year or so)

For Have-Not households, concerns are very tangible


The fractured landscape

Prism of Income and Generation Remains Critical

Note: Older households 50 years old or older, Younger households 49 years old or younger; Have Nots: <$60K, Haves $60K+

Source: Kantar Retail analysis

HaveHave Not

Yo

un

ge

rO

lde

r

$

= 21%

= 37%

$

= 20%

= 34%$

= 31%

= 15%

$

= 28%

= 14%

8


Younger Households More Focused on Immediate

Have Nots Haves

Younger

Older

Unexpected expense

Paying bills

Price increases

35%

34%

33%

November elections

Health insurance costs

Unexpected expense

22%

21%

20%

November elections


Value of investments

26%

25%

17%


November elections

Price increases

33%

31%

30%

Note: Older households 50 years old or older, Younger households 49 years old or younger; Have Nots: <$60K, Haves $60K+

Source: Kantar Retail ShopperScape®, February/April/May/June 2016

9

Top 3 Macro Environment Concerns, by Shopper Segment

Older Have households most focused on investments


10

Positive Retail Spending Plans Persist

Source: Kantar Retail ShopperScape®, December 2008–June 2016

Retail Spending Intentions in Coming Month, Compared with Same Period Last Year(three-month moving average)

13%

63%

24%

0%

10%

20%

30%

40%

50%

60%

70%

De

c-0

8

Feb

-09

Apr-

09

Jun-0

9

Aug-0

9

Oct-

09

De

c-0

9

Feb

-10

Apr-

10

Jun-1

0

Aug-1

0

Oct-

10

De

c-1

0

Feb

-11

Apr-

11

Jun-1

1

Aug-1

1

Oct-

11

De

c-1

1

Feb

-12

Apr-

12

Jun-1

2

Aug-1

2

Oct-

12

De

c-1

2

Feb

-13

Apr-

13

Jun-1

3

Aug-1

3

Oct-

13

De

c-1

3

Feb

-14

Apr-

14

Jun-1

4

Aug-1

4

Oct-

14

De

c-1

4

Feb

-15

Apr-

15

Jun-1

5

Aug-1

5

Oct-

15

De

c-1

5

Feb

-16

Apr-

16

Jun-1

6

Spend Much/

Somewhat More

Spend about

the Same

Spend Much/

Somewhat Less

2016


11

5%5%

6%10%

17%

3%3%

11%12%

13%

12%27%28%

Household servicesPersonal services

Going out/entertainmentMedia plans/services

Going out/restaurants

Specialty/gourmet foodsConsumer electronics

ApparelMaking home improvements

Health care services

Personal care productsBasic groceries/HH essentials

Fresh foodsNEEDS:

Non-Discretionary

Goods and Services

WANTS:

Discretionary Goods

and Services

Food Most Likely to Draw More Spending

Fresh food, basic groceries, and eating out are top three things where shoppers

spending more

Source: Kantar Retail ShopperScape®, May 2016

Where Shoppers Are Spending More(share of shoppers reporting spending more on category vs. the same time last year)


12

77%75% 73%

68% 66%

55% 54%50%

45%

33%

26% 26%

15%

24% 27% 29% 36% 38% 47% 50% 52% 59% 70% 77% 77% 87%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Go

ing o

ut:

ente

rta

inm

ent

Sp

ecia

lty/

gou

rme

t fo

od

s

Go

ing o

ut:

resta

ura

nts

App

are

l

Pe

rso

na

lse

rvic

es

Ho

me

imp

rovem

ents

CE

Pe

rso

na

l ca

rep

rod

ucts

Hou

seh

old

se

rvic

es

Fre

sh

fo

od

s

Ba

sic

gro

cerie

s/

HH

essen

tia

ls

Me

dia

pla

ns/

se

rvic

es

He

alth

ca

rese

rvic

es

Spending More Because Treating/Splurging/Able to Do So Spending More Because Prices Higher/HH Needs Changed

— Share of shoppers spending more

Top Categories for Splurging: Going Out, Specialty Food

Source: Kantar Retail ShopperScape®, May 2016

Why Shoppers Are Spending More: By Choice or By Necessity(among all shoppers indicating spending more on category vs. the same time last year)


13

Going Out: Entertainment … More CPG Brands Joining

Fashion, Tech, and Media Brands at Music Festivals

Source: Kantar Retail analysis, bizbash.com

Brands at 2016

SXSW

• American Greetings

goes analog with

coloring wall

• Gatorade

“personalized” drink

pods

• Bud Light music

showcase venue

with interactive swag

wall/photobooth

• Scott’s lawn party


Friends of 365 within 365

By Whole Foods stores

Newly Renovated Macy’s

Features Smoothie Bar

Kellogg’s and Chobani

Cafes

14

Going Out: Restaurants … More Dining Options Debuting in

Retailers; Brands Debuting Dining Options

Source: Kantar Retail analysis and store visits; company websites


15


Who, What, and Where


16

Race/Ethnicity Differences Strong in These Regions

Understanding the nuances of metropolitan area will make a difference

Note: Arrows indicate significant difference between column percentages (95% confidence level)

Source: Kantar Retail ShopperScape®, January 2016–September 2016

Demographic Profile of Shoppers

All ShoppersMidwest

Shoppers

West South

Central Shoppers

West

Shoppers

Annual HH

Income

<$25K 25% 25% 27% 26%

$25K–$49.9K 25% 26% 27% 24%

$50K–$74.9K 18% 18% 18% 17%

$75K–$99.9K 12% 12% 10% 12%

$100+ 21% 19% 17% 22%

Race/

Ethnicity

White Non-Hispanic 71% 82% 60% 65%

Black Non-Hispanic 12% 9% 14% 6%

Hispanic 13% 6% 22% 20%

Asian 3% 2% 3% 6%

Children in

Home

HH with Kids 25% 26% 25% 24%

No Children 75% 74% 75% 76%


MidwestWest South

CentralWest

Top Five Mass/Club/Discount/Drug

Retailers Shopped by Region

Top Five Supermarket Retailers Shopped

by Region

17

MidwestWest South

CentralWest

Target

Dollar Tree

Dollar General

Where Are People Shopping?

*Denotes stub “Other traditional supermarket/grocery store retailer not listed here (e.g., Basha’s, Top’s)“

Source: Kantar Retail ShopperScape®, January 2016–September 2016

More likely to shop at select FMCG retailers, supermarkets highly regional

Other

Regional*

Other

Regional*Other

Regional*


Among Midwest Supermarket Retailers, the “Big” Trip Illusive

All Store

Types(All banners)

Stock-up trip 33% 39% 39% 35% 37% 21%

Fill-in trip 27% 31% 30% 26% 18% 26%

Immediate use 14% 12% 10% 13% 9% 16%

Specific sale

items11% 4% 14% 13% 21% 20%

Specific coupons 7% 5% 2% 8% 8% 7%

Special occasion 4% 4% 3% 3% 3% 8%

Browsing/new

items4% 4% 3% 2% 3% 3%

Primary Reason for Last Grocery Trip, by Retailer Shopped on Trip

All retailers reported at national level

Source: Kantar Retail ShopperScape®, November 2015, February/May/August 2016

18


34%

19%

46%41%

33%

Walmart Aldi Kroger Meijer Hy-Vee

Among Midwest Retailers, Kroger Banners and Meijer Best

at Capturing Shoppers’ Grocery Basket

Past 4-Week Retailer Shoppers that Report Spending the Most on Food/Groceries at That Retailer

WMSC:

24%

Kroger

(All banners):

11%

WMSC:

28%

Next most

frequently cited

store of preference

Kroger

(All banners):

19%

19



WMSC:

19%


20

Shoppers Have Different Store-Choice Priorities

Winning for the right reasons true differentiation

Top 3 Reasons for Choosing Retailer as Preferred Grocery Store

1) Convenient

location (55%)

2) Lower everyday

prices (43%)

3) Better sales/

promotions (36%)

1) Convenient

location (63%)

2) Better sales/

promotions (35%)

3) Lower everyday

prices (35%)

1) Convenient

location (57%)

2) Better sales/

promotions (36%)

3) Higher quality

fresh foods (30%)

Kroger (All banners) Meijer Hy-Vee

1) Lower everyday

prices (94%)

2) Convenient

location (42%)

3) Faster checkout

(20%)

Aldi

All retailers reported at national level.



HEB Owns the “Big Trip” in the South Central Region

All Store

Types

Stock-up trip 33% 39% 44% 35% 22%

Fill-in trip 27% 31% 28% 26% 27%

Immediate use 14% 12% 13% 13% 17%

Specific sale items 11% 4% 3% 13% 22%

Specific coupons 7% 5% 5% 8% 5%

Special occasion 4% 4% 4% 3% 7%

Browsing/new items 4% 4% 3% 2% 1%


21

21




34%

59%

46%

16%

Walmart HEB Kroger Albertsons

HEB Maintains Unprecedented Loyalty in Grocery Basket

Spending




Kroger

(All banners):

11%

WMSC:

18%

WMSC:

19%

WMSC:

26%

Next most

frequently cited

retailer

22


H-E-B Stands Apart Due to Perceived Perishable Product

Quality


1) Convenient

location (63%)

2) Better sales/

promotions (35%)

3) Lower everyday

prices (35%)

1) Convenient

location (66%)

2) Lower everyday

prices (49%)

3) Higher quality

fresh foods (34%)

1) Convenient

location (78%)

2) In-stock on items I

want (28%)

3) Better sales/

promotions (25%)

H-E-B Kroger (all) Albertsons

1) Lower everyday

price (68%)

2) Convenient

location (55%)

3) One-stop shop

(33%)

Walmart

23

All retailers reported at national level.



Top Western Retailers Rely on the Sale/Fill-in Trip

All Store

Types

Stock-up trip 33% 22% 23% 35% 23%

Fill-in trip 27% 27% 27% 26% 31%

Immediate use 14% 17% 22% 13% 21%

Specific sale items 11% 22% 17% 13% 5%

Specific coupons 7% 5% 5% 8% 2%

Special occasion 4% 7% 4% 3% 8%

Browsing/new items 4% 1% 2% 2% 10%


24

24




16%

30%

46%

10%

Albertsons Safeway Kroger Trader Joes

Kroger Banners Win Big in the Western Region




Kroger

(All Banners):

11%

WMSC:

13%

WMSC:

19%

Kroger

(All banners):

11%

Next most

frequently cited

retailer

25


In the Western Region, Trader Joe’s Differentiates Itself on

Fresh


1) Convenient

location (63%)

2) Better sales/

promotions (35%)

3) Lower everyday

prices (35%)

1) Convenient

location (73%)

2) Better sales/

promotions (32%)

3) Frequent shopper

program (26%)

1) Higher quality

fresh foods (49%)

2) Lower everyday

prices (39%)

3) Convenient

location (37%)

Safeway Kroger (All Banners) Trader Joe’s

1) Convenient

location (78%)

2) In-stock on items I

want (28%)

3) Better sales/

promotions (25%)

Albertsons

26




27


Digging Deeper


28

67%

64%

56%

49%

45%

38%

27%

18%

15%

11%

10%

65%

64%

58%

48%

44%

37%

27%

18%

16%

11%

10%

Spending as little money as possible

Feeling like I got a "good deal"

Having a stress-free shopping experience

Doing most of my shopping in one place

Completing my shopping quickly

Purchasing high-quality products

Having fun/enjoying myself

Interacting with helpful, friendly employees

Discovering new products or brands

Having access to information about products/brands

Supporting retailers/brands that reflect my values

2014

2015

Minimizing Spending, Deals Most Important to Shoppers

But are becoming less of a focus, while desire for stress-free shopping increases

Arrows indicate significant difference vs. 2014 (95% confidence level)

Source: Kantar Retail ShopperScape®, January–December 2014 & 2015

What’s Important When Shopping(share of shoppers who rank factor among four most important when shopping)

Stress-free shopping

has grown in

importance more so

than any other factor.


Although a national trend, stress-free shopping not as much of a priority in the West

58%

60% 59%58%

58% 58% 58% 57% 57% 57%

57% 57% 57% 57% 57% 57% 57% 56%

55% 54%53%

52%

50%

29

Arrow indicates significant difference vs. all shoppers (95% confidence level)

Source: Kantar Retail ShopperScape®, January–December 2015

Shoppers Who Rank “Stress-Free Shopping” Among Their Top Four Most Important Factors

When Shopping

Kroger refers to shoppers of Kroger’s regional locations

Western Regionals West South CentralWest All Shoppers Midwest

Western Shoppers Less Concerned with Stress-Free…

Midwest Regionals


30

10%

21%19% 19%

15%13%

13% 13% 13% 12% 12% 12% 12% 11% 11% 11% 11% 11% 10% 10% 10% 10%

8%

…But More Likely to Back Brands that Align with Values

WFM shoppers across regions place greatest importance on supporting values



Shoppers Who Rank “Supporting Retailers/Brands That Reflect My Values” Among Their Top

Four Most Important Factors When Shopping

Kroger refers to shoppers of Kroger’s regional locations

Western Regionals West South CentralWest All Shoppers Midwest Midwest Regionals


Deal focused

31

Value Not Entirely Derived by What a Shopper Spends

Most regional grocery shoppers value getting a deal over spending less



65%62%

65%61% 62% 61%

57%

64% 64% 65% 66% 66% 67% 68%

All Shoppers H-E-B Hy-Vee Albertsons/Safeway

Meijer Roundy's Ralphs

Spending as little money as possible Feeling like I got a "good deal"

Shoppers Who Rank Factor Among Top Four Most Important When Shopping

Kroger banners - Roundy’s and

Ralphs shoppers show greatest

preference for getting a deal

over spending less


32

Regional Grocery Shoppers More Likely Than Average to

Value Experiential Factors

Retailer logos indicate shoppers are significantly more likely to value factor (95% confidence level)


All

shoppersSignificantly more likely to value

Spending as little as possible 65%

Feeling like I got a "good deal" 64%

Having a stress-free a shopping

experience58%

One-stop shopping 48%

Completing shopping as quickly

as possible44%

Purchasing high-quality products 37%

Having fun/enjoying myself 27%

Interacting with helpful, friendly

employees18%

Discovering new products /brands 16%

Access to info about

products/brands11%

Retailers/brands reflect my values 10%

Shoppers Who Rank Factor Among Top Four Most Important When Shopping


33

Shoppers Look to Streamline ShoppingBut a deal orientation remains top priority among shopping approaches for 2016

Source: Kantar Retail ShopperScape®, October 2015

Top 5 Planned Shopping Approaches for 2016

“Streamlining” or limiting behaviors make up three

of top five shopping approaches

46% 41%35% 34% 30%

Taking advantage ofgood sales/deals

Buying only things Itruly need

Buying fewer things Using more coupons Shopping less often


35%

52%

47%

42% 42%39% 38% 38% 37% 36%

34% 33% 33% 33%32% 31%

29%

24%

34

Simplification Skews Strongest Across Midwest Regions Sticking to essentials particularly popular among shoppers of WSC retailers


Source: Kantar Retail ShopperScape®, October 2015

Shoppers Planning to Buy Fewer Things in 2016



35

67%

46%

46%

39%

30%

25%

24%

20%

68%

48%

44%

41%

35%

30%

26%

26%

Make a handwritten shopping list

Look at printed store circular/ad for specific retailer(s)

Select paper/printed coupons to take with me on shopping trip

Look at printed store circulars/ad to decide where to shop

Look at online circular/weekly ad for specific retailer(s)

Look at online circulars/weekly to decide where to shop

Search for coupons online

Load electronic coupons onto a frequent shopper card

2014

2016

Digital Pre-Trip Planning Continues to Rise Popularity

Shoppers are significantly more likely to look at online circulars, search for coupons

online, and/or load electronic coupons onto a frequent shopper card vs. 2014

Arrow indicates significantly greater percentage vs. all shoppers (95% confidence level)

Source: Kantar Retail ShopperScape®, February 2014 and 2016

Pre-Trip Planning Activities


36

Meijer Shoppers More Likely to Engage in Pre-Trip

Planning Activities

All

shoppersSignificantly more likely to engage in activity

Make a handwritten shopping list 68%

Look at printed store circular/ad

for specific retailer(s)48%

Select paper/printed coupons to

take with me on shopping trip44%

Look at printed store circulars/ad

to decide where to shop41%

Look at online circular/weekly ad

for specific retailer(s)35%

Look at online circulars/weekly to

decide where to shop30%

Search for coupons online 26%

Load electronic coupons onto a

frequent shopper card26%

Retailer logos indicate shoppers are significantly more likely to value factor (95% confidence level); low sample size Giant Eagle (90)

Source: Kantar Retail ShopperScape®, February 2016


26%

52%

46%

42% 41%

36% 35%32% 32%

29%28% 27% 26% 26% 25% 25%

21% 20%

15%

37

Electronic Coupons Popular in the West

Shoppers that Load Electronic Coupons Onto a Frequent Shopper Card



Kroger shoppers, both in Midwest and West, especially likely to use electronic

coupons



38

Simple Personalization Can Make Big Differences

The right message in a shopper’s inbox can drive traffic and conversion

Source: Kantar Retail analysis, retailer websites


39

35%

16%

43%

Primarily/exclusively shopperimeter departments

Primarily/exclusively shop centerstore aisles

Shop perimeter departmentsand center store aisles equally

One-Third of All Shoppers Primarily Shop Perimeter

However, more shoppers favor perimeter than center store


How Shoppers Typically Shop a Supermarket


40

Online Grocery Still in Early Adoption StageOver three quarters of shoppers with access to online grocery do not use it; a

large number of Meijer shoppers, however, use it extensively

Source: Kantar Retail ShopperScape®, July 2015

13%

11%

77%

A little A significant portion None

of Meijer shoppers who

have access to online

grocery services report

online constitutes a

significant portion of their

total grocery shopping

Portion of Grocery Shopping Done Online(among shoppers with access to online grocery services)

Access to Online Grocery(% of shoppers claim access in their state)

34% have access

29% don’t have access

37% unsure


+14 ppt

41

Although Current Usage Is Low, Interest Is Fairly High

Especially high interest in the West South Central, less in West


Source: Kantar Retail ShopperScape®, August 2016

9% 9% 9%11%

9%7%

23%

20%22% 22%

26%

30%

All shoppers West Midwest Northeast Southeast West SouthCentral

Have used online grocery Very interested in online grocery

+11 ppt +13 ppt +11 ppt +17 ppt +23 pptgap:

Online grocery refers to any of the following methods: home delivery, click-and-collect

curbside pickup, click-and-collect in-store pickup, click-and-collect designated point pickup,

and personal shopper delivery

Usage vs. Interest in Online Grocery(usage among all primary household shoppers; interest among primary household shoppers who do not use online grocery)


The convenience online grocery offers may appeal to these shoppers seeking

value in terms of both money and time

23%

35%33%

30% 30% 29% 29%27% 27% 26%

26% 25% 24%

22% 22% 21%19% 19%

42


Source: Kantar Retail ShopperScape®, August 2016

Shoppers With High Interest in Online Grocery(% of shoppers who claim to be very interested in any online grocery method)

High Interest in Online Grocery Among Dollar Shoppers

Online grocery refers to any of the following methods: home

delivery, click-and-collect curbside pickup, click-and-collect

in-store pickup, click-and-collect designated point pickup,

and personal shopper delivery



43

Exploring the Eastern Grocery Shopper: Key Takeaways

1

‒ Spending intentions remain high, which signals continued opportunity

… but it’s clear the opportunity is not distributed equally.

‒ Gen Y (a.k.a. Millennials) are key source of growth for many goods and

services categories, but don’t forget that Gen X and Boomers combine

for scale.

2

‒ In mass and drug channels, national players prevail, but strong regional

retailers and corporate banners capture fair share of grocery spending

dollars.

‒ Imperative to understand national retailers’ strategies for regional

banners.

‒ Differentiating beyond price and location is critical to optimizing the

capture rate of shoppers’ grocery spend.

3

‒ Recognize how your retailers’ shoppers define value. There are

different needs and motivations for different value definitions.

‒ Explore how your brands and categories can support a stress-free

shopping experience.

‒ Define your role and commitment to your retailer’s digital efforts.

Source: Kantar Retail analysis


44

For further information please refer to

www.kantarretailiq.com

Contact:

Diana Sheehan, Director

T: 708.250.3693

[email protected]

@KR_DianaS

@kantarretail

www.kantarretail.com

http://www.kantarretail.com/

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