Supermarkets, step up to satisfy less-forgiving consumers

February 28, 2014

New research shows performance pressures increasing on supermarkets, with trips in play.

Two surveys released this month show different views of customer satisfaction with U.S. retailers.  

Increasingly demanding consumers underlie both sets of findings - and point to a future where retailers (especially food retailers selling perishables) will get fewer chances to slip up and still retain individual customers, we believe at The Lempert Report.  

For example, Internet sellers disappointed many buyers with post-holiday deliveries this past Christmas season.  As a result, their benchmark rating in the American Customer Satisfaction Index dove 4.9% to 78, the lowest score since 2001.  Amazon fared relatively well, up 4% to top the sector at 88.

More details from the ACSI study:

  • National and regional supermarket chains rose a collective 1.3% to 78, based on grocery values, locations and hours.  Publix extended its yearly streak at the head of the trade class, with an 86.
  • An aggregate group of smaller regionals rose three points to 81 to notch second place. Kroger came in at 80, Whole Foods Market slid 3% to 78.  Winn-Dixie, Supervalu and Safeway posted scores of 76 and 77, and Walmart trailed at 72, ACSI reported.

Meanwhile, non-grocers continue to secure more consumer trips for food.  More than three-quarters (77%) say they bought groceries from a non-grocer during the past 12 months – and more than half (52%) do so more than monthly, according to the King Retail Solutions-University of Arizona Center for Retailing Fall 2013 study of Millennials, Gen Xers and Boomers.  These newly released 12-month figures hold true across all income groups and locales (suburban/urban/rural) as well.  And a full one-quarter of shoppers (24%) “made a grocery list intending to fulfill the entire list at a non-grocery,” says the report.

The news gets worse for supermarkets: 96% say they would buy groceries from a non-grocer in the coming 12 months.

“Delivering a valuable shopping experience is the real challenge,” says Andrew Swedenborg, executive vp at King Retail Solutions.  

Yet different generations each value different aspects of the store.  For instance, Boomers, rural dwellers, and people earning $50,000-$100,000 per year value quality over convenience, the study shows.  Convenience stores attract 57% of grocery-buying Millennials vs. 40% of Gen Xers and 36% of Boomers.  Drug stores appeal to 47% of grocery-buying Millennials, 37% of Gen Xers and 36% of Boomers.

In fresh prepared foods, however, supermarkets hold a decided edge:  74% of consumers overall say they buy at the supermarket vs. 44% at the big box, 28% at the c-store and 9% at the pharmacy. 

This study further corroborates the trip erosion at supermarkets, which pressures them to perform better in a less forgiving environment.