Everyone Getting Into the Grocery Business
Channel blurring, specifically related to grocery sales, is not a new idea. Certainly there is plenty of evidence it’s taking place with dollar stores, drugstores, online grocers and many other non-traditional outlets.
For those rushing into the business, the question becomes how do they differentiate from those already selling groceries. What, for example, would make consumers choose to buy their Cheerios or private label equivalent from Dollar General rather than from Aldi, Amazon.com, Costco, Fresh & Easy, Schnucks, Target, 7-Eleven, Walgreens or Whole Foods?
Paul Simon, a spokesperson for Schnucks, told the St. Louis Post-Dispatch, “It’s nothing new to us. We’ve learned to compete against it for the last 20 years now.”
For many consumers today, the choice comes down to price. They shop where they expect to save the most money.
“When the economy went south, grocers had a bit of an uphill battle,” Susan Viamari, a consumer trends analyst with SymphonyIRI, told the Post-Dispatch. “They were perceived as more expensive than a supercenter or dollar store. So in the past couple of years, we’ve seen grocers really honing their value image.”
Another consideration, also related to price, is the tendencey for consumers to consolidate purchases at a single outlet rather than spend more on gas at current high prices.
Ms. Viamari said that more extensive food offerings have helped drugstores gain share in grocery categories.
“Consumers are doing more shopping at drugstores, trying to streamline the amount they are driving because gas prices are so high,” she told the Post-Dispatch.
- Retailers look toward groceries to goose sales – St. Louis Post-Dispatch
- Is Target on the Right Path? – RetailWire
- Rite Aid and Save-A-Lot in Drug/Food Combo Test – RetailWire
- 99¢ Only Starts Milk War in Dallas – RetailWire
Discussion Questions: Who do you see as the near and longer term winners of the multi-channel battle for grocery share? What channels do you see gaining and losing share?