Like increasing numbers of grocery shoppers, Ty Rushmeyer doesnt have a regular store.
The 28-year-old and his wife shop at Rainbow once a week, but they also stock up their pantry at Target. Then there are fun runs for unique products at Trader Joes, Whole Foods, an Asian market, a local co-op and, in season, the farmers market. Were looking for healthier options, Rushmeyer said. But were also deal-seekers. We know which store has the best price for each item.
Welcome to the new grocery landscape, in which traditional grocers are less able to count on loyal customers who buy everything they need in one visit. Instead, shoppers are spreading their money around and constantly looking for deals. Traditional grocers are getting squeezed, not only by Target and Wal-Mart, but also by co-ops, farmers markets, specialty gourmet stores, budget grocer Aldi, dollar stores and drugstores.
Consumers are constantly comparing from retailer to retailer, said John Rand, a supermarket analyst for Kantar Retail in Cambridge, Mass. If a store starts to slip because its prices are out of line or quality is suffering, people will quickly move on.
Traditional grocery stores nationwide have lost 15 percent of their market share in the past 10 years, said Phil Lempert, a food industry consultant at SupermarketGuru.com.
The increased range of shopping options is changing the grocery business in many ways. Square footage allocated to groceries grew 5.7 percent from 2005 to 2011, according to the Food Marketing Institute, but the increase was at supercenters, convenience and dollar stores, warehouse clubs and discounters/liquidators. Traditional supermarkets decreased their space allotment.
At Walgreens, food and beverage items now make up 20 percent of the merchandise, and the company plans to allot more space, said Jim Jensen, divisional vice president. Food, along with beauty and health items, gets customers to visit the store more often and buy more, he said. RiteAid and CVS also devote more of their space to food items.
Low prices, however, are no guarantee of attracting harried shoppers. Consumers are looking not only at their wallet, but also the clock and the gas gauge, said consumer behavior analyst Paco Underhill. They dont always need to choose from 15 types of pasta in a supermarket. Three is enough when youre time-crunched.
Indeed, it can be quicker to pick up milk and eggs while youre already getting gas at a convenience store, or a prescription at Walgreens or CVS.
With the competition adding food to increase sales and store visits, Rand said, traditional grocers are going through another phase of their life cycle. Analysts are waiting for them to find a new path to revitalize and strengthen them.
Theyre going through a difficult patch, he said. But its way too soon to write them off.