Food marketers are sharply watching two increasing trends in the buying habits of today’s grocery consumer—health and savings. Consumers want healthier foods because there is more and more national discussion about the effects of diet on our health. Plus, health is interrelated with savings because more and more consumers want the healthiest items for the best price; a grocery chain that can provide both is demonstrating greater value to their customers. And leading grocery banners across the country are capitalizing on this.
Better health and more savings
Safeway actively promoted organic and natural private-label products for their holiday season. At the same time, they launched a micro-site called “Holiday Inspirations” that showed shoppers how to prepare a holiday meal that could be as good for their health as it was for their wallets.
SKM client TOPS Friendly Markets aggressively promotes “more ways to save than any other grocery store” while also touting NuVal® Nutrition Scores placed on all food items, making it easy for shoppers to trade up to better nutrition. (NuVal ranks food items from 1 to 100 for nutritional value; the higher the number, the better the nutritional value.)
On the home page of Whole Foods, you’ll find a prominent “What’s on sale?” link directly below a website section called “health starts here.” By website layout alone, Whole Foods demonstrates to their customers that what is often top of mind always remains above the fold in their communications.
Winn-Dixie promotes both health and savings with “Healthy Living” (featuring the tagline “Fresh Start, Better You”) along with “What-a-Deal” (tagline: “Saving you money on the things you need most”).
Consumers and retailers aren’t the only agents driving the demand for healthy items. Manufacturers are listening to the national discussion on healthy diets, as well. Take Kellogg’s, for example; they’ve devoted an entire website to health and nutrition at kelloggsnutrition.com where consumers can find everything from nutritional information to advice about living a healthy lifestyle.
Many retailers have ramped up their emphasis on health with educational promotions. Publix hosted a company-wide produce department promotion to benefit the public Let’s Move Salad Bars to Schools initiative. The promotion aims to teach children that colorful, fresh produce tastes as good as it looks with the goal of developing a love for these healthier, nutrient-rich foods.
Savings remains the driving factor
As consumers express more demand for health food options, they are also looking for sales and coupons in record numbers. A Market Pulse survey reported that 36% of people now download coupons from retailer websites, 49% “use a store circular to create a list,” and 51% “are using more coupons.” Even more interesting, 63% of those surveyed said that “price trumps convenience in brand purchases.” The Supermarket Guru Consumer Research Panel study echoes the Market Pulse findings; the grocery consumer has been hit hard since 2008, and 44.7% of shoppers have been “looking for deals/ discounts before shopping,” taking advantage of the internet with budget blogs, forums and printable coupons, as well as using traditional circulars and coupons.
Two further examples of retailers’ efforts to better position themselves according to frugal consumer habits include Piggly Wiggly’s new “Comeback Cash,” which gives customers coupons for future visits based on their total monthly spend. Kroger recently launched “Digital Coupons,” which can be downloaded to a customer’s loyalty card before they go shopping. Marketers are implementing similar savings incentives programs industry-wide to encourage more trips and bigger basket share.
The grocery space is certainly going to be competitive in 2012 as retailers must meet their customers’ demand for both healthy and affordable products to put in their carts and stock in their cabinets. In order to do this, retailers must balance the way they market health and savings incentives. “Retailers that understand the definition of value is based significantly, but not exclusively, on price and convenience, will win in today’s exceedingly unforgiving environment,” says John McIndoe, SVP of Marketing for SymphonyIRI Group.
These health and savings trends will continue to be relevant to consumers in 2012. In fact, the tough economy and an increasingly health-conscious culture strongly suggest that these trends will evolve beyond the next fiscal year. Grocery retail marketers are expanding their efforts to meet consumer demand in unprecedented numbers.