Discount grocery stores, led by Aldi, have largest gain in share of trips, while traditional grocers, Target and CVS lose share in food and beverage categories
Shelton, CT – September 25, 2017 – Online grocery shopping’s share of trips in the U.S. has grown 13 percent over 2016, according to TABS Analytics’ Fifth Annual Food and Beverage Consumables Study. Although regular online shopping has increased, it is still eclipsed by the 98 percent of consumers who reported shopping in brick and mortar grocery outlets for foods and beverages (also known as consumables). For the first time, the annual TABS study analyzed the U.K. food and beverage market and found that online grocery shopping accounts for 8 percent of all shopping trips, which is more than double the U.S. number of 3.6 percent.
“U.S. online grocery shopping continued its second year of gains for regular purchasing and it is being driven largely by growth in click-and-collect pickup,” said Dr. Kurt Jetta, CEO and founder of TABS Analytics. “However, with such a small portion of consumers reporting they are regular online shoppers, brick-and-mortar stores are not going away any time soon. Perhaps most telling, online shoppers only have a 38 percent stated loyalty, compared to the more than 70 percent loyalty for consumers shopping at brick-and-mortar stores. Loyalty to online needs to double before it becomes a formidable competitor and reach levels comparable to the U.K., which is currently at 61 percent.”
In the 2017 Food and Beverage Consumables Study, TABS made a technical adjustment in the calculation for “all outlet share,” which resulted in a restatement of market penetration and share for each of the U.S. outlets compared to last year. It is important to note, however, that the year-over-year percentage changes remained consistent with this restatement.
Discount grocery stores, led by Aldi, had the largest gain in share of all outlets and now commands 5.5 percent share of all U.S. food and beverage grocery trips. In comparison, the TABS study found that discount grocery stores Aldi and Lidl account for 17 percent of all U.K. grocery trips, almost triple the size of the U.S. The study also found that Walmart remains firmly in first place among all U.S. food retail banners and increased its share from 15.2 to 16 percent in 2017. Dollar stores also realized an increase in share, jumping from 7.4 to 7.9 percent. Costco increased from 5.9 to 6.5 percent, a full point higher than discount stores combined. Although grocery outlets continue to have the highest share of trips at 20.9 percent, they lost 1.7 percentage points compared to 2016. Target declined in share from 9.4 to 8.4 percent and CVS also declined from 7.3 to 6.2 percent.
TABS’ Fifth Annual Food and Beverage Study was conducted in August 2017 by TNS and was designed to uncover how consumer buying patterns within these categories are shaped by the promotions offered. The 2017 study also surveyed the same categories in the U.K. to provide comparative points between the countries, particularly for online grocery. In the U.S., 1,000 consumers 18 years and older were surveyed and 1,268 consumers 18 years and older were surveyed in the U.K. There were 15 consumables categories analyzed: carbonated beverages, salty snacks, cereal, yogurt, water, ice cream, cookies, fruit juice, refrigerated juices, crackers, frozen pizza, frozen novelties, candy, popcorn and sports drinks.
Key findings from the study:
- Online U.S. grocery shopping grew for second straight year, but remains a small part of overall market. TABS estimates that online grocery sales represent 3.6 percent of all food and beverage purchase trips. In terms of penetration (consumers making at least one trip per year to an outlet), Amazon led all ecommerce grocery outlets with 25 percent, an increase of 9 percentage points over 2016. Walmart.com and Target.com finished second and third respectively, with 14 and 9 percent penetration. Online sales from brick-and-mortar stores declined by more than 50 percent over the past two years, dropping from 16 percent in 2015 to 7 percent in 2017.
- U.K. online grocery shopping is significantly higher than in the U.S. Eight percent of all U.K. trips are online, compared to 3.6 percent in the U.S. Additionally, those who buy online regularly (6+ times) in the U.K. comes in at 31 percent, more than double than that of the U.S.
- U.K. and U.S. markets, other than online, are more similar than different. Purchasing patterns in the U.K. and the U.S. were very similar, however U.K. consumers had a somewhat lower demand for snacks and beverages. U.S. was markedly higher in categories, such as salty snacks, cereal, frozen novelties, bagged candy, popcorn and sports drinks, while the U.K. showed preferences for fruit juice and yogurt.
- The snack food and beverage market is up across every category for the first time in the five years the study has been conducted. Based on the 2017 results, category purchase frequency data suggests a turnaround is at hand since the survey methodology employed predicts changes in trends.
- Deals translate into higher sales. Everyday low prices (EDLP) is the most important factor for most consumers in making purchases, with 63 percent indicating they use this specific deal tactic. Consumer desire for EDLP bodes well for the continued success of discount grocers, like Aldi and Lidl, which are expanding and gaining traction in the U.S.
- Households with kids continue to rule the food and beverage consumables market. Households with kids are the primary driver of the sales gains across food and beverages categories, and continue to be most important demographic sector with 51 percent of households with kids reporting as being heavy buyers.
- 14 percent of consumers now buying organic drinks and snacks, up 3 percentage points over 2016. Households with kids and consumers ages 18-34 are the largest group of organic purchasers. Households with kids increased their purchasing from 11 percent last year to 19 percent in 2017. Another large year-over-year jump was seen in the age 45-54 category, which nearly doubled to 14 percent, indicating that organics are becoming more mainstream.
TABS Analytics Fifth Annual Consumer Value Study is available here. Throughout 2017, TABS Analytics is conducting six studies across the consumer-packaged goods industry, including personal care, baby, vitamin, food and beverage, household care products, and beauty and cosmetics. More information about TABS studies is available at www.tabsanalytics.com/resources.
About TABS Analytics
Operating since 1998, TABS Analytics, based in Shelton, Conn., is a technology-enabled analytics firm. Its mission is to simplify and improve the way analytics are conducted in the consumer products industry. TABS offers cloud-based software analytics and applications solutions, including TABS Insight® and TABS Total Insights™, for CPG manufacturers that integrate, harmonize, and analyze sales and marketing data. Additional services include TABS CatMan Advantage™, an outsourced category management solution, TABS WorldView™, a global business intelligence tool, and TABS Promo Insight™, a cloud-based software and consulting service that helps companies measure, plan and optimize trade spending. For more information, please call 203-446-8837, email robertbaldwin@tabsanalytics.com or visit www.tabsanalytics.com
