Supermarket Perimeter - June 2024 - 9

perception we continue to find in our
research. "
By " inaccurate profit perception, "
shoppers, communicate better, and increase
transparency and trust. "
Numainville means the commonly held belief
among consumers that retailers are making far
more in profit than they actually are.
According to the Retail Feedback Group
survey, shoppers believe their primary grocery
store has a net profit of 31%.
That's actually slightly lower than results
from the past two years. But it's miles
away from the actual net profits of most
supermarkets, which has been close to 1%
historically, according to FMI - The Food
Industry Association.
Given the consumer misunderstanding
of the true profitability of supermarkets,
and the fact that 93% of shoppers are using
inflation-coping strategies, it isn't surprising,
Numainville said, that shoppers expect
supermarkets to do more in helping them deal
with food price inflation.
Some of the top strategies shoppers are
using to combat food price inflation - buying
more items on sale (65% using), buying more
store brands instead of national brands (49%),
and using a store's weekly sales flyer to plan
a shopping list - are all techniques that
supermarkets can directly and proactively use
to communicate how they're doing as much as
possible to help shoppers, he added.
" Given the increase in nearly all food
price inflation coping strategies yearover-year,
consumers continue to look for
ways to save money in the face of food
price inflation. So clearly, they believe this
challenge will continue into the foreseeable
future. It's in the best interest of supermarket
retailers to find ways to continue to listen to
Consumer perception
The Retail Feedback Group study also tracked
the top factors consumers cited as reasons for
higher prices at the supermarket.
At the top of the list was government
policies and actions, with a score of 3.86 on a
scale of 5.
Other groups or other factors, in order,
included:
* Product manufacturers and suppliers (3.75);
* Wars and worldwide political conflicts (3.42);
* Supermarket retailers (3.40); and
* Labor supply shortages (3.23).
Factors viewed as least responsible were
climate change factors (2.85) and farmers and
growers (2.78).
" In this politically charged environment,
supermarket shoppers believe that
government policies are the leading influence
on higher supermarket prices, " said Doug
Madenberg, chief listening officer of The
Feedback Group. " More holistically, what
emerges is a picture of multiple factors that the
average consumer navigates, all contributing
in various degrees to the price tag they face at
the checkout. "
Swapping out
Consumers have fought inflation by
substituting less expensive versions of some
of their favorite products, Leo Feler, chief
economist for Numerator, a data insights
firm, said in a recent FMI - The Food Industry
Association webinar.
And it doesn't mean shoppers have to
sacrifice fresh.
Deli,
bakery
impact
Discretionary dollars
are becoming tighter as
consumers continue to be
impacted by inflation leading
to a shift in instore bakery
and deli purchase decisions,
said Jannah Jablonowski,
public relations manager for
Giant Eagle.
Under these circumstances,
she added, bakery purchases
may become less frequent,
so product quality and the
introduction of new and
seasonal items become
important opportunities to
drive customer engagement.
In the deli, meanwhile,
it's more common to see
shoppers trade down to try
to save money.
92% of consumers think food prices
have been too high for too long.
Nearly 75% still express concerns around
the lingering effects of inflation.
60% of consumers still expect their
future finances to remain unchanged.
Source: Datassential
supermarketperimeter.com
JUNE 2024 - 9
" Consumers may be
purchasing less in each
shopping trip or selecting
value-focused offerings
instead of choosing premium
options, " Jablonowski said.
" In order to drive sales
despite these challenges,
we're focusing on presenting
limited-time seasonal items
and leaning into trending
flavors to capture interest.
We also prioritize cross
merchandising plans that
showcase a meal or occasion
solution to customers. "
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Supermarket Perimeter - June 2024

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