Affluent grocery shoppers number around 42 million in the United States, with household incomes of $150,000 or more
Grocers looking to leverage the opportunity in attracting affluent food shoppers should be following four key strategies, according to a new report.
The market research report "Affluent Food Shoppers," by Rockville, Md.-based market research company Packaged Facts, identifies four key ways that U.S. grocers can better attract and meet the needs of this important consumer segment (around 42 million people with household incomes of $150,000 or more):
Reflect the Values of the Natural Channel: Whether they actually shop in natural food stores, affluent food shoppers clearly reflect the food culture of the natural channel. This means that grocers interested in expanding their affluent shopper base need to promote values such as Fair Trade, local sourcing, sustainably grown products, humane treatment of animals, and clean labeling. It also means carrying brands that align with the mindset of affluent food shoppers. For example, brands meeting the expectations of affluent food shoppers often have a philanthropic image and frequently characterize their ingredients and products with terms such as "honest," "authentic," "trusted," "finest," "freshest," natural," "pure," "real" and "safe."
Carry a Wide Range of Organic Fresh, Refrigerated and Frozen Foods: Since affluent food shoppers are far more likely to buy organic fresh and frozen foods, stores need to provide a full range of options in this category. For example, data featured in the report reveals that affluent food shoppers are 40% more likely than food shoppers on average, and even more likely than non-affluent food shoppers, to use organic meat or poultry and frozen foods.
Give Affluent Food Shoppers More of the Center Store Products They Want: In many ways, affluent food shoppers are just as likely as food shoppers on average to use a wide variety of condiments such as ketchup, mustard, dry-mix salad dressing, marinades and spaghetti/pasta sauce. A number of shelf-stable packaged foods are much less likely to gain the attention of affluent food shoppers, such as packaged instant potatoes, canned chili, shelf-to-microwave dinners and canned spaghetti. However, affluent food shoppers are just as likely as food shoppers on average to buy items such as packaged pasta, rice and rice dishes, canned or packaged soup, cold and hot breakfast cereals, and canned tomatoes.
Still, grocers need to respond to the fact that the center store choices of affluent food shoppers stand apart in two ways. First, when affluent food shoppers do buy shelf-stable foods, they have a high propensity to select brands other than popular national brands. Many of these are likely to be those often found in stores in the natural channel. Moreover, they're much more prone to use a wide range of organic shelf-stable foods. For example, affluent food shoppers are 25% more likely to use organic breakfast cereal and 34% more likely to use organic pasta.
Take Steps to Improve Foodservice Options: Grocery stores face stiff competition for affluent food shopper dollars from restaurants and meal delivery services. Affluent food shoppers are far more likely than their non-affluent counterparts to agree with the statement "I often go out to eat because my life is too hectic to put a meal on the table every night," or to have ever used a restaurant meal delivery service such as Grubhub or Uber Eats. Highly affluent food shoppers are especially likely to avoid cooking at home and shopping.
Yet data indicates that affluent food shoppers currently exhibit relatively lukewarm interest in the prepared food choices they currently find in their supermarkets and grocery stores. Affluent food shoppers are somewhat less likely than their non-affluent counterparts to agree that they often eat store-made meals. Likewise, affluent food shoppers are somewhat less likely to buy prepackaged store-made meals, although they are somewhat more likely to use in-store cafes.
The Market Bistro concept store of Schenectady, N.Y.-based Price Chopper provides one example of how supermarket chains are attempting to continuously improve the quality and desirability of their in-store foodservice offerings. The store includes a full-service sit-down restaurant as well as individually branded foodservice stations. The company transfers menu items to its Price Chopper and Market 32 stores when they've proved suitable for expansion.
Other grocers are bringing in established small local or specialty restaurant brands to diversify their foodservice options. Examples include the Cincinnati-based Kroger Co.— which has partnered with a number of small restaurant brands — and Rouses, an independent grocer based in Thibodaux, La., which has installed a branded Asian stir-fry operation in some of its stores.
The Packaged Facts report focused on the food-shopping and -buying patterns of affluent food shoppers, who are defined as those with a household income of $150,000 or more. Affluent food shoppers are further segmented into mass affluent food shoppers, with a household income of $150,000-$249,999, and highly affluent food shoppers, with an income of $250,000 or more.
Kroger operates nearly 2,800 retail food stores under various banner names, including Ralphs, employing nearly half a million associates, and is No. 2 on Progressive Grocer’s 2019Super 50 list of the top grocers in the United States. No. 25 on PG's list, the Golub Corp. owns and operates more than 130 Price Chopper and Market 32 grocery stores in New York, Vermont, Connecticut, Pennsylvania, Massachusetts and New Hampshire. With more than 60 stores in Louisiana, Mississippi and Alabama, family-owned Rouses made its debut this year at No. 47 on the list