Supermarkets Challenged by Millennials, Aldi

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Supermarkets Challenged by Millennials, Aldi

12/13/2017

Although supermarkets earn the highest ratings in quality and variety, Aldi has a considerable lead in value for the money and a slight edge in the checkout experience, according to the Retail Feedback Group’s (RFG) "2017 U.S. Supermarket Experience Study." What’s more, Millennials gave lower ratings than older shoppers for every aspect of the supermarket trip.

Supermarket shoppers gave an overall satisfaction (OSAT) rating of 4.42 on a five-point scale before 3 p.m., but this mark dropped to 4.36 between 3 p.m. and 7 p.m. Several factor ratings were considerably lower after 3 p.m. than earlier in the day, among them cleanliness, quality/freshness, staff friendliness and value for money.

Shoppers rated quality/freshness of the food and groceries (4.45) and cleanliness of the store (4.40) as the two strongest core experience factors. Associated friendliness – the highest-rated service factor – garnered a more moderate rating of 4.34, followed by associate helpfulness/knowledge (4.24), checkout speed/efficiency (4.23) and associate availability (4.19).

While supermarkets did well on general variety and selection (4.38), scores were lower on natural and organic items (4.05), ethnic/international products (3.97), allergen-free items (3.97) and locally sourced items (3.96).

The lowest score among all core experience factors went to value for the money spent on a visit, at 4.18. Further, meat prices (3.98), produce prices (4.03) and everyday prices (4.03) all received low scores in the supermarket channel, while advertised sales items scored much higher (4.38). Interestingly, 76 percent of shoppers consult one or more advertising/sales vehicles – traditional, social, mobile and digital – before or during their shopping visit.

“These survey findings point to a critical need for grocery retailers with a physical presence to step up their game,” asserted Doug Madenberg, principal at Lake Success, N.Y.-based RFG. “When people shop in a supermarket, the overall experience, assortment and value proposition need to be excellent in order to earn their next visit. There are too many grocery options available online, in hard discount stores, and across other formats, for an average or subpar supermarket visit to be acceptable.”

Threat assessment

Shoppers who visited an Aldi in the past 60 days were more likely to recommend the store (4.54 on a five-point scale) than supermarket shoppers, who gave an average rating of (3.66). Also, 33 percent of those who shopped at Aldi said that they intended to shop there more in the next 12 months, versus 21 percent for supermarket shoppers and 10 percent for Walmart shoppers. In core experience ratings, Aldi shoppers gave value for money the highest marks (4.68), also scoring the deep discounter higher than supermarkets on checkout speed (4.30). Walmart shoppers gave lower scores on the all the core experience factors.

Millennials scored supermarkets lowest on all core experience factors, as well as overall trip satisfaction. Boomers, however, rated overall trip experience and almost all core experience factors highest, with only one area – staff knowledge/helpfulness — rated equal by both Boomers and Gen Xers.

“The fact that overall trip satisfaction and all of the core experience factors register lowest among Millennials should be a call to action for supermarkets,” warned RFG Principal Brian Numainville. “Traditional supermarkets must find ways to make the supermarket more appealing and relevant to younger shoppers or risk becoming endangered as Boomers age and purchase less.”

Overall, only 14 percent of all supermarket shoppers have tried a meal-kit delivery service in the past year, but Millennials showed stronger trial than either Gen Xers or Boomers. Blue Apron, Home Chef and Hello Fresh were the three services used most. Top reasons given for meal kit usage were home delivery (46 percent) and time savings (45 percent). Of those who didn’t use a meal-kit service, the main reasons given were that they were too expensive (48 percent) or lack of interest in meal kits (44 percent). Meal-kit users were most satisfied with ingredient quality (83 percent highly satisfied) and least impressed with value for money (65 percent highly satisfied).

Overall, 15 percent of shoppers also noted that their primary supermarket offers meal kits. Among those who bought a meal kit from their primary supermarket, the main reasons given were good value (54 percent), ingredient quality (53 percent) and time savings (51 percent).

Grocery retailers, food distributors and media outlets can get a free copy of the full report, now in its 10th year, which is based on a nationally representative study of 1,200 supermarket shoppers.