How can supermarkets attract the newest generation of grocery shoppers—the Millennials—and turn them into loyal customers?
That’s probably the biggest strategic challenge facing retailers today. However, new research suggests that the answer may be found in the fresh departments along the store perimeter.
A nationwide survey of more than 1,800 shoppers age 20-29 reveals that Millennials love food, but want food done their way. The report, “How America’s Eating Habits Are Changing,” conducted by the Private Label Manufacturers Association (PLMA), New York, also shows that fresh and healthy foods are at the top of their shopping lists, while prepared and portable foods are also very popular.
These food choices reflect a distinctive way of eating. For Millennials, eating is largely unscheduled. They incorporate food consumption—whether meals, snacks or bites—into a range of everyday activities, from work and play to exercise and commuting,
So, where do Millennials find the foods they favor? While they purchase from many different sources, they frequently shop at supermarkets. And, once inside the store, they often head to the fresh dairy, deli and bakery departments. The study found that three-quarters of shoppers buy deli items in the supermarket where they do their regular grocery shopping, 77% buy dairy items and 59% buy bakery items.
Reflecting their on-the-go eating habits, one third “always or frequently” purchase heat-and-eat food from the supermarket, 29% pick up prepared or ready-to-eat foods and 27% buy grab-and-go prepared food items from a source such as a supermarket or convenience store. Millennials are a generation of nibblers and experimenters, so in-store sampling and demonstrations are popular.
Home or away, this age group is drawn to all things fresh. On occasions when they eat at home, including meals and snacks, 57% of them “always or frequently” opt for fresh fruits, 35% for fresh baked bread products, 30% for fresh prepared meals and 30% for fresh and chilled deli salads.
The PLMA study indicates there is likely to be a big payoff for supermarkets who successfully adapt to the new eating habits of the Millennials. Contrary to expectations, these shoppers are more loyal to their favorite stores than their parents. Nine of 10 do their regular grocery shopping in only one or two stores. This represents a dramatic departure from recent PLMA studies that saw consumers spreading their shopping among a multiplicity of stores.
This loyalty has important implications for store brands. As they select products, Millennials are well informed about brands, including store brands, and where foods come from. Nine of 10 say they are aware of the ingredients in the food products they eat, and three of four read the nutritional labels on products. Their awareness of store brands and national brands is virtually the same at 84% vs. 86%.
“Store brands remain the retailer’s most potent weapon in developing strategies for this age group,” says Brian Sharoff, president of PLMA. “It offers flexibility and opportunities to be creative with product assortment and concept without waiting for national brands. But, it requires an understanding of what this age group likes and will buy.”
PLMA commissioned Surveylab, a research center in the Division of the Social Sciences of the University of Chicago, Chicago, to conduct a comprehensive, nationwide online survey of 1,839 shoppers (931 women, 908 men) between the ages of 20-29, primarily the core group of the Millennial generation. This demographic group represents upwards of 50 million Americans, or about 15% of the total population. In number of participants, this is the largest survey PLMA has ever commissioned in the United States.