Help shape the new reality

November 06, 2011

Food stores could grow by showing compassion to shoppers in tough times – offering helpful services and item alternatives.

For food retailers to post sales growth in real dollars (not due to inflationary hikes), they’ll need to count on sheer numbers of new American consumers – because unrelenting pressures on the middle class have them spending less or about the same, not more, depending who is answering the question.

It seems like forever since the recession hit in 2008. So much evidence of savings strategies shows how America turned into trip planners, coupon clippers, bulk buyers and basket splitters, and shoppers of multiple channels and substitute brands.

The Lempert Report sees another dimension – a longer-lasting and more disturbing shopper mindset that says ‘we can do with less, it’s ok, we’ll manage.’ These shoppers appear to have donned a spending cap that’s lower than it was three years ago – after all, many have far smaller household budgets now. It’s questionable to us if their food spend will ever rise again to the higher level.

Retailers that really analyze spending trends in their trading areas will be more aligned with the millions of households poorer in money and time, making ends meet with multiple lesser-paying jobs, and perhaps with multiple generations living under one roof. It’s not a pretty picture. Whether these shoppers will select favorite brands in smaller packages, or shift to alternate brands or private label, stores that make these choices available will continue to be their destinations.

Better still, we think stores that position themselves as built for this new reality can gain by endearing themselves to customers. Here are a few ideas:  Message welcomes to families on food stamps (15% of the U.S. population is on SNAP), the unemployed and the self-employed with free wi-fi, networking events and coffee, breakfast and lunch specials – all in an in-store dining area that generates trips and reinforces the supermarket as a pillar of the community. What else can you think of to help good customers who are now in need?