The economy and new technology are prompting major changes in the way consumers shop, according to the findings of the Food Marketing Institute’s (FMI’s) 2012 Grocery Shopper Trends research.

Food Marketing Institute, FMI, 2012 Grocery Shopper Trends research, FMI 2012 show, Dallas, Booz & Co., FMI president and chief executive officer Leslie Sarasin,

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FMI eyes changing consumer

May 14th, 2012

DALLAS – The economy and new technology are prompting major changes in the way consumers shop, according to the findings of the Food Marketing Institute’s (FMI’s) 2012 Grocery Shopper Trends research.

The preliminary results of the study, presented at the recent FMI 2012 show in Dallas, identify at least four major and interrelated trends. The first involves changes in shopping habits that have occurred in response to the recent recession and subsequent weak economic recovery.

Consumers responded to the 2007 to 2009 recession by choosing private brands and less expensive food options, making fewer shopping trips and buying fewer items at the grocery store, looking around for deals and generally seeking value in their grocery purchases.

Even consumers not directly affected by the recession exhibited some of the same frugal behaviors, according to the study, conducted by FMI and Booz & Co.

"We’re seeing a new normal emerge," said FMI president and chief executive officer Leslie Sarasin, who presented the preliminary results of the study. "Informed by a lack of confidence in the economy and the residue of the tough times they faced, shopper buying patterns have shifted in the direction of value-seeking behavior and a continued search for the biggest bang for the buck at the checkout stand. And there’s every indication that this shift has staying power."

The research suggests the possibility that an entire generation of consumers will have their shopping habits permanently changed by the recent Great Recession, in the same way that the generation of consumers that grew up during the Great Depression of the 1930s were permanently affected by that economic crisis.

"Several years ago about 60% of our shoppers were diving for discounts," Sarasin said. "Now about 80% are. That represents some 19 million more American households that are on the discount safari. And they’re becoming smarter and more systematic in the way they’re doing it."

Another trend is the fact that technology has become a fact of shopping life.

More than half of all shoppers now use technology either before or during their shopping trips. And in many cases they are using the Internet to look for deals, coupons and price comparisons before they visit the store. As technology improves, though, more and more consumers will be able to conduct the same research while they are ­shopping.

The third trend has to do with the fact that consumers are not just researching their purchases online, but are actually using the Internet to do their shopping. Online shopping is nibbling away at supermarkets’ center-store business, Sarasin said.

"Over half the shoppers surveyed say they’ve made a purchase in an online grocery category. Clearly the majority of online shopping is currently in nongrocery categories such as electronics, books, music, clothing or footwear. But we’d better pay attention or we risk having our company names included with the likes of Circuit City, Borders and Tower Records.

"In 2010 online shopping accounted for $12 billion in sales of consumer packaged goods. By 2014 that number will more than double. As a percentage of total CPG sales — 2% in 2010 — that number is not all that impressive. But it will do nothing but increase as ‘digital natives’ — that’s what we call the first generation wet-nursed on digital technology — form their own households and become shoppers."

The final trend identified by the research involves format innovation. The FMI notes that over the past five years, the grocery industry has added about 150 million square feet of new capacity, but none of that space was added by conventional supermarket operators. Instead, it was added by supercenters, dollar stores, drug stores and other formats.