When Is a Grocery Store Not a Grocery Store?
Published in CSP Daily News
Study examines increasingly blurred lines of brick and mortar food retailing
EUGENE, Ore. -- The answer to the question posed in the headline to this story is found deep in a Forbes magazine report entitled "Are Grocery Stores Doomed? Study Shows More Shoppers Buying Food at Target, Walmart, Pharmacies."
The Forbes headline, however, leaves out the answer. When is a grocery store not a grocery store? When it's a convenience store.
More than ever, consumers are looking to big-box stores such as Walmart and Target, as well as c-stores, dollar stores and pharmacy chains including Walgreens and CVS to fulfill their grocery lists, said the report, citing a new study published by retail design firm King Retail Solutions (KRS) in conjunction with the University of Arizona's Terry J. Lundgren Center for Retailing.
Eugene, Ore.-based KRS surveyed more than 1,200 shoppers and found that 77% of respondents across all three demographics--Millennials, Gen X and Baby Boomers--bought groceries from a nongrocer in 2013. A full 96% of those surveyed said they will be buying groceries from places other than grocery stores in 2014.
Target and Walmart top KRS' ranking of the 20 most popular places to shop for groceries that are not traditional grocers. Behind the two big-box giants, survey respondents listed pharmacy chains Walgreens and CVS as their favorites ahead of bulk retailer Costco, followed by Dollar General, then farmers markets and food stalls at No. 7 on the list. Dollar Tree, 7-Eleven and Kmart round out the 10 most popular nontraditional grocery stores.
Kwik Trip, Wawa and Circle K are also on the list.
"It can't all be about one-stop-shop, but if it's a retailer they appreciate, they are going to shop there," said KRS' Andrew Swedenborg of these findings. "If new, nontraditional items are available for sale, they are going to buy those items."
The study also includes a ranking of the top 20 favorite places to buy prepared meals that are not restaurants. Walmart and Target again topped the list; 7-Eleven took the No. 7 slot.
KRS conducted the study to better understand U.S. consumers' current and evolving shopping habits and purchasing motivators, especially as they relate to grocery, fresh-prepared meals, clothing and services ranging from haircuts to medical treatments purchased from a nontraditional source. Each of these categories has seen expansion at retail establishments ranging from supermarkets and c-stores to big box and department stores.
The results of the study illustrate the changing retail landscape and shoppers' embrace of a blurred retail environment. The study also analyses demographic variances and suggests that category blurring will continue to thrive, making the embrace of new sales channels both an opportunity for retailers and a source of new competition as retailers expand to compete outside of traditional channels, for example grocery stores competing with quick-service restaurants (QSRs).