Study: Shoppers Loyal to Local

CHICAGO — Consumers, getting more serious about their quest for local food, are choosing to do their food shopping where local products are available, and are willing to pay a premium price for them, research by A.T. Kearney shows. Not only that, but many of the respondents in the study favor local over organic.

A.T. Kearney, a global consulting firm, conducted an online survey in November 2012 that included 1,300 respondents, split 50-50 between men and women, all over the age of 18.

“What stood out to me in the research, was that there was a focus on value, and that consumers are willing to pay a premium price for local products,” James Rushing, A.T. Kearney partner and leader of the study, told SN.

A whopping 70% of respondents said they’d pay more for local products, and a surprising 30% said they’d do their food shopping elsewhere else if their preferred supermarket did not carry any local products.

The majority who said they would pay more for local products included consumers in all income levels. Even those who described themselves as having a low income said they’d pay more for local products.

“Of course, you have to take into account how much of the local products they would buy,” Rushing pointed out. Low-income shoppers don’t opt for local products as often as those from higher income groups.

While the big national chains have the most to gain from adding local products, they also have the most work to do to find credible local sources, and to earn the trust of their customers when it comes to how local their products are, Rushing said.

The research showed that consumers have a trust issue regarding products labeled “local,” especially in the large, national chains and big-box stores.

Seventy percent of shoppers are willing to pay a premium for local products. Photo by Stephen Sullivan

“We’ve learned that larger-format retailers have a lot of work to do to earn the trust of consumers ... but it’s worth the effort,” Rushing said, adding that the pay off is customer loyalty.

Some definitions of “local” refer to products sourced as far away as 400 miles or within a state. But, as A.T. Kearney’s researchers and Rushing point out, it is the individual retailer’s option to define local as it sees fit and make sure customers know what its definition of local is.

In that regard, communication with customers on the subject is particularly important, he said.

Rushing pointed out that while some retailers see sourcing local products as a possible nightmare for category managers, that need not be the case. All stores will not have the same local products, he said, because what can easily be sourced differs by region. Third parties with expertise in locating appropriate sources could be put to work.

What’s important, Rushing added, is for retailers to realize the local movement is an emerging trend and big opportunity lies in it. Having a broad selection of quality local products can give retailers an important point of differentiation.

Read more: Selling Local Is Good for Business, Retailers Say [2]

Consumers say they embrace local products for several reasons. A majority (66%) of this current study’s respondents said they opt for local products because it helps local economies. Sixty percent said local sourcing delivers a broader and better assortment of products, and 45% consider local products healthier alternatives.

It particularly interested researchers that respondents found local products more attractive than organic products.

Sixty-eight percent of respondents said local food contributes positively to sustainability, while only 50% said they believe that’s true of organic food.

Respondents said buying local products supports local farmers, offers fresher produce, and reduces the environmental impact of transporting food over long distances, the research report states.

“It’s little surprise then that large grocery chains and big-box retailers worldwide have begun to take notice, as more shoppers are willing to pay a premium for local food — seeing it as better-tasting, more trustworthy and more sustainable,” researchers wrote in the report.

Wal-Mart [3] plans to increase its share of local produce to 9% by 2015. Supervalu [4], owner of the Jewel-Osco, Albertsons and Lucky Supermarkets in the United States, estimates that it buys between 25 and 40 percent of its produce locally.”

A.T. Kearney researchers concluded that no matter the format or venue in which local products are presented, freshness and quality are paramount.

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