It is becoming increasingly difficult for supermarket operators to play to the middle, said Leslie G. Sarasin, president and CEO, Food Marketing Institute, in her keynote address Wednesday at FMI Connect in Chicago.
“For years there was a case for food retailers to maintain a mid-market strategy — don’t get too high, and offer good value. But today it’s a different day,” she told attendees. “Americans are choosing to go either up or down.”
While some mid-market shoppers are trading up for more quality and variety, value shoppers are forsaking those qualities to meet their budgets.
“These value shoppers may like mid-market stores better, and they may even rate them substantially higher than the store they feel they must shop, but in the end, they feel they simply cannot afford to shop mid-market,” Sarasin said.
Since 2011, she noted, mid-market supermarkets have lost share in 14 different categories studied, while more upscale specialty stores have gained across the board, and value stores have gained in almost all categories.
“Shoppers, especially the large number of value shoppers, are being increasingly selective about what they buy and where they buy it,” Sarasin said.
She said retailers must have good knowledge of their local consumer base in order to best position their stores.
“You must know your shopper population — it’s about knowing your clientele’s needs, because their preferences may be a whole different matter,” she said.
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