Younger shoppers spread purchases across many new options, including online services. Grocers are struggling to lure e-commerce loving millennials into their aisles amid what experts say is a permanent shift in shopping patterns among consumers.
Baby boomers used to bring long grocery lists to supermarkets and club stores. Now shoppers in their 20’s and 30’s are visiting supermarkets less frequently than their parents, government records and survey data show. They are spreading purchases across new options, including online grocery services such as AmazonFresh, beefed-up convenience stores and stronger food offerings from omnibus retailers like Wal-Mart Stores Inc. and Target Corp.
“I don’t think we’ve seen shopping change so dramatically ever,” said Marty Siewert, senior vice president for consumer and shopper analytics at Nielsen. “Those things in the past that have been real drivers for grocery in terms of freshness and quality aren’t the key drivers for millennials.”
Consumers between 25 and 34 years of age last year spent an average of $3,539 on groceries, about $1,000 less in inflation-adjusted dollars than people that age spent in 1990, federal data shows.
On average, consumers overall bought $4,015 in food for their homes last year.
The shift away from big grocery bills wasn’t as obvious before the financial crisis saddled millennials with student debt and weak job prospects, and placed a lasting drag on consumer spending. Sales at food and beverage retailers rose 3.7% between 2002 and 2007, an analysis of U.S. Census figures by A.T. Kearney shows, while they grew just 2.4% annually from 2008 to 2013.
The more than 75 million Americans born in the 1980’s and 1990’s are also delaying marriage and childbearing, milestones that traditionally lead people to start making big trips to the grocery store.
Aging baby boomers also cut back on grocery-store spending, federal data shows. That is coming during one of the worst slumps in years for food retailers, especially those most dependent on brick-and-mortar stores.
To win over the key young consumer group, some supermarkets are testing smartphone apps that customers can use to place their orders in advance, and introducing new product lines. Grocers are joining with third-party services such as Instacart Inc., Shipt and UberRush to reclaim millennials before they drift further to Amazon.com Inc. or other delivery services such as FreshDirect.