Study Probes Spending Habits of Millennial Grocery Shoppers

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Study Probes Spending Habits of Millennial Grocery Shoppers

05/24/2016

Although 57 percent of Millennials said they had been personally affected by the Great Recession, just 8 percent reported cutting their spending on groceries, according to results of an industry study profiling Millennial grocery shoppers from Retale, a location-based mobile advertising platform for retailers and brands.

Using the Great Recession, which fundamentally changed consumer shopping and saving habits, as the basis for its commissioned study, Retale evaluated recessionary impact on grocery buying, specifically among survey respondents.

When the study, which examined grocery shopping preferences among 1,000 consumers in the 18-34 age group between May 2-6, compared older Millennials (26-34) with younger Millennials (18-25) , the older group felt more affected by the economic downturn (64 percent). When asked which activity they were most likely to cut spending on as a result of the recession’s impact, 36 percent cited “eating out,” 30 percent said “entertainment,” and 21 percent said “buying clothes.”

“Like most age groups, Millennial consumers have felt the recession’s impact,” said Pat Dermody, president of Chicago-cased Retale. “According to our data, to counteract it and save, they’re dining out less and opting to eat at home more. This is why there hasn’t been a sizable decline in grocery shopping, post-recession. Lost restaurant trips should ultimately benefit grocery retailers.”

When asked how often they shop for groceries, respondents most often answered two to three trips a month (34 percent), followed by once a week (29 percent), once a month (15 percent), two-four trips a week (14 percent), less than once a month (6 percent), and every day (3 percent).

For each trip, on average, 20 percent of Millennials spend 0-$49, 37 percent spend $50-99, 35 percent spend $100-200, and only 9 percent spend more than $200.

34% Thrifty

Despite the ways the economy has managed to recover since the recession, consumers are still taking a practical, cost-conscious approach to buying.

When respondents were asked to choose the three most likely factors in picking a grocery store, the top response was “lower costs or opportunities to save” (50 percent). “Availability of locally grown or organic products” (38 percent) was the runner-up, followed by “store is close to my house or workplace” (34 percent), “technology that makes research and shopping easier” (31 percent), and “I shop based on specific recipes I’m interested in making” (28 percent).

Similarly, when they were asked to describe their “grocery shopping style” in one word, “thrifty” was the most popular choice (34 percent), with “local” (24 percent) and “foodie” (23 percent) rounding out the top three.

“At the end of the day, when it comes to buying groceries, Millennial consumers value cost above all else,” added Dermody. “Local or organic, store proximity or technology for convenience – they all come in second to savings. Grocers need to keep this in mind when considering how to best market and sell to this audience.”

When Millennials were asked when they would be “most likely” to go grocery shopping, practicality and cost were uppermost in their minds. 57 percent said they were most likely to shop when they “needed to restock on supplies,” and 25 percent said when “deals and discounts are available.” Seventeen percent said they were most likely to shop when they were “planning meals or a recipe.”

43% Use Mobile Coupons

Today, 92 percent of Millennials own a smartphone. When asked if they used their mobile device before grocery shopping to help with their trip, the majority (52 percent) of Millennials polled said “yes”; 48 percent said “no.” Older Millennials were more likely to use their mobile device (62 percent), whereas only 36 percent of younger Millennials had used their device before shopping.

Similar to other data points that found Millennials to be cost-conscious buyers, their most popular reason to use a smartphone before they went shopping was to “clip mobile coupons” and “browse weekly ads” (43 percent). Rounding out the top five were to “create and manage shopping lists” (27 percent), “find recipe inspiration” (12 percent), “find store locations and hours” (10 percent), and “look up loyalty account information or my points balance” (7 percent).

Once Millennials entered a grocery store, 58 percent said they used their mobile device while shopping, compared with 42 percent who don’t. This was more prevalent among older Millennials, 64 percent of whom said they used their mobile device while shopping, compared with 47 percent of younger Millennials . Forty percent of those who used their mobile device in-store said they used it “to find coupons and compare prices.” Respondents also used mobile in-store to “consult shopping lists” (29 percent), “call or text another member of their household for information or recommendations” (15 percent), or “find a recipe” (11 percent).

When asked to identify what would most enhance their grocery shopping experience, 41 percent said they would like “offers, like coupons, sent to their smartphone when they enter a store.” 18 percent wanted “more self-serve checkout," 14 percent wanted “in-store kiosks that offer product information or coupons," 12 percent cited “the ability to scan an item on my mobile device to get more information about it," and 10 percent said “mobile pay options at checkout.”

“Mobile is an integral part of the Millennial experience, making smartphones the perfect shopping companion for this group,” observed Dermody. “Mobile is especially and increasingly seen as a key tool to drive store savings with each trip. We also saw that older Millennials tended to use their phone more than younger Millennials, perhaps indicating a more concerted effort to save among those most affected by the recession.”  

The full Retale "Millennial Grocery Report" can be found here.