Traditional grocery stores, be warned.
According to research from the Urban Land Institute, 63% of millennials say they grocery shop for non-perishables at Wal-Mart, Target, Kmart, Meijer, or other discount department store with a food section (for some surveyors, among other types of stores), and 49% say they go to these stores (again, some among others) for fresh grocery purchases.
Some of the biggest retailers in the space, Wal-Mart and Target, have both recently revealed notable and distinct changes to their food sectors that reflect the in flux state of the industry, where the ever-flighty consumer rules.
Wal-Mart’s food leadership
Wal-Mart unveiled executive changes in its food sphere, including its grocery executive vice president Jack Sinclair’s retirement come March 20 and some shifts among top grocery personnel.
Bloomberg notes, “The company’s grocery business has struggled with quality concerns, a reduction in food-stamp benefits and rising supply costs.”
Back in October, Wal-Mart said it would emphasize fresh groceries to join the big leagues and start beefing up a rivalry with supermarket chains.
Perhaps new management could revive Wal-Mart’s image in this arena and get more consumers inclined to shop there for items of better quality and rid itself of a less-than-stellar reputation for food.
Target’s overhaul
Meanwhile, Target’s reported grocery change-up offers not quite the same executive rigamarole, but one that acknowledges the retailer is working to revitalize its food business.
The Wall Street Journal reported about a number of changes before CEO Brian Cornell spoke with investors.
“Guests have asked us to elevate the assortment of food, to elevate the in-store experience and to celebrate the joy of food,” Cornell recently told investors, according to a Supermarket News piece. “So we will test what we need to do over the next year to enhance the section because we believe food represents a significant opportunity for us.”
He added, “Guests tell us they expect food in our stores, but they want more choices that support our wellness goals, and they want us to be more specialized with unique, differentiated items.”
Cornell addressed possible investor confusion, that while food at Target may not be “a signature category,” it is still important to the business.
On the contrary, Wal-Mart appears to be emphasizing food a bit more extensively, at least according to what Brian Yarbrough, an Edward Jones analyst in St. Louis, told Bloomberg. “Food is a big part of what Wal-Mart has become,” he said. “It is a big traffic driver.”
The industry as a whole
As company after company offers more gluten-free, fresh, and what are considered more healthful offerings, it appears to make sense that grocers would capitalize on said changes and give consumers the options they’re craving.
However, does this mean consumers are really starting a revolution against purchasing less healthy, in this case, sugary items? According to a certain study, this may not be the case.
Perception plays an important role here as well, as seen by this latest Associated Press piece about Coca-Cola — if an expert suggests a mini-can of Coke or soft drink as a snack choice, won't consumers be more likely to jump on it?
The next few years are going to be a true test for these retailers to get to the bottom of what their consumers are asking for, and they better do it fast.