From meal box subscription services to online and in-person specialty grocery outlets, the avenues from which Americans have available for food shopping have expanded widely in the past several years.
As interest in participating in these alternative food systems has grown, UF Food and Resource Economics researchers look to quantify food market outlet choices to better understand what types of food outlets are being visited in the United States and if the food outlet choices vary across consumer segments.
In a recently published article in International Food and Agribusiness Management Review, assistant professor Lijun Angelia Chen, professor Lisa House, and former UF food and resource economics professor and current Senior Economist on the Applied Research and Methods Team at the US Government Accountability Office Xiang Bi looked at over 21,000 observations from a nationwide survey that was conducted monthly and compiled from July 2016 through November 2019 to compare shopper activity at eight food outlet formats within four categories (high-end, traditional, broad-assortment, and limited-assortment).
“The food retail sector in the United States is experiencing intensifying competition, characterized by a mix of consolidation and diversification,” said Chen, an assistant professor in the UF Food and Resource Economics department and lead researcher on the study. “Analyzing where consumers from different backgrounds go and fill their food baskets helps marketers and policymakers better understand consumer trends and the competitive dynamics among various store formats.”
While the traditional grocery store is still the most common single food outlet of the eight looked at in the study, with 78% of respondents saying they go to traditional supermarkets to shop, others have become popular as well. The broad-assortment category as a whole was actually the most frequented category, with 84% patronage with its two outlet types (supercenters and warehouse clubs, and mass merchandisers) combined. However, supercenters and warehouse clubs on their own as a single food outlet type also came close to traditional supermarkets, with 73% of reported shoppers visiting these types of stores.
Results also showed that many consumers exhibit cross-shopping patterns, meaning that they go to multiple types of stores, such as a supermarket, a specialty store, and a dollar store, to get all of the things they need.
“Cross-shopping means consumers visit various stores to fulfill their grocery needs. Investigating cross-shopping behavior reveals the complimentary and substitute relationships among store types,” Chen said. “This knowledge aids retailers in gaining insights into who they share the customer base with and who the competitors are. Furthermore, cross-shopping patterns are contingent on consumer segments identified by preferences for local and organic food. Consequently, the competitive dynamics between stores differ for organic-minded consumers versus non-organic consumers.”
When looking further at the difference between demographics, results showed that women were more likely than men to visit the traditional format – supermarkets, whereas men were more likely to visit alternative outlets. Younger shoppers also were more likely to visit one of the alternative outlets. Local- and organic-minded consumers displayed a higher tendency to shop at multiple stores, favoring alternative outlets, compared to those who didn’t show interest in local and organic foods.
“When it comes to promoting value-added food products such as local and organic foods, it is critical for retailers to ascertain the shopping preferences of local- and organic-minded consumers,” Chen said “This involves an understanding of their broader shopping patterns across different outlets. Such insights are invaluable for retailers seeking to effectively cater to the needs of specific consumer segments and optimize their marketing strategies.”
Moving forward, Dr. Chen and her collaborators will continue conducting research that helps us better identify grocery shopping trends.
“In the coming phases of my research, I am interested in further investigating grocery shopping trends by differentiating “primary” and “fill-in” food outlet choices,” Chen said“Additionally, I am collaborating on a study with my Ph.D. student Faith Aiya, Dr. Lisa House, and Dr. Kimberly Morgan, examining how U.S. consumers food lifestyle patterns have been changing during the course of the COVID-19 pandemic.”
The full article, “Food outlet choice patterns of alternative food system consumers,” is available now in International Food and Agribusiness Management Review: https://doi.org/10.22434/IFAMR2022.0095
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