The Future of Natural Supermarkets
By Phil Lempert
Momentum is building to separate out “natural supermarkets” from the supermarket channel. One reason is to analyze the metrics, e.g., profit, number of SKUs, customer count and square foot in order to compare those to a traditional store. Another reason is to document the growth of this sub-channel and compare it to the less than stellar growth of the entire channel.
More conventional chains have created new “natural” banners and opened new stores in order to capitalize on the opportunity. And the opportunity certainly is there. In our 2014 NGA SupermarketGuru Annual Consumer Panel Survey, which will be released at the upcoming NGA Convention on February 11th, for the seventh year in a row the “desire to be healthy/eat what’s good for us” leads the list of nutritional content concerns; aiming to eat healthier, 80.8% of consumers consider health claims “almost always” or “sometimes” when considering purchase of a new food item.
And then there is “fresh!” Arguably the most powerful trend in the supermarket today, especially when coupled with local sourcing. “Health” is the answer most often given as the leading reason why people eat fresh foods. Another reason to focus on fresh, is that the heaviest grocery spenders $81+ per week lead the response.
All good reasons behind the effort; however, aren’t we looking at this a bit skewed?
We should be looking at natural supermarkets as the evolution of today’s supermarket – not as an additional format to add even more clutter to the choices of where consumer have to decide where to shop. Over the past 40+ years we have seen produce departments grow larger, shelves are now stocked with more organic offerings, we sell higher quality more unique private brands and prepared foods departments have become centerpieces evolving from their deli case roots. The supermarket industry didn’t decide to spin off new banners that offered only bottled waters, or just coffees or an assortment of disposable cleaning wipes.
Supermarkets have always been resilient to meet consumer needs, changing innovations and trends. While it is true we have seen a substantial percentage of food and beverage sales shift to other channels, is it possible that this has happened because the supermarkets of late have not evolved to meet shopper needs? That the industry has talked more than listened and tried to force fit concepts including EDLP into their stores, to find out that their regular shoppers have moved on?
As the supermarket industry prepares for new challenges from drug chains, upgraded and upsized c-stores and yes, natural supermarkets perhaps its time for an evolution revolution.