Everyone likes a good deal, but it turns out price isn’t always king.
Thanks to a 13% increase in food-at-home prices during the past year, consumers hoping to stretch their grocery dollars further are looking for good value at the supermarket. However, the latest survey by The Food Industry Association (FMI) reveals that the definition of value is becoming increasingly complex, subjective and personal. As a result, says FMI president and CEO Leslie Sarasin, “Price is not necessarily the be-all-end-all when it comes to shopper perceptions of value.”
This is great news for everyone that isn’t Walmart or Aldi.
YOUNG DRIVING CHANGE
If the old formula — getting more for less — no longer applies, how do today’s consumers define value? Well, it depends who you ask. While getting good value is a high priority across income levels and demographic groups, younger consumers in particular have very different ideas about what that actually means.
For example, reports FMI, 62% of millennials say they prefer to minimize food waste by buying only what they need while 47% say they’re willing to spend more money to avoid shopping at multiple stores. An even higher number (50%) say they would spend more to shop at more pleasant stores (compared with just 16% of Baby Boomers). Younger shoppers are more interested in quality as well, with 52% of millennials and 42% of Gen Zers reporting they’re willing to buy the best quality items regardless of price, compared to just 22% of Baby Boomers. They’re also much more likely than Gen X and Boomers to prioritize ethical considerations such as fair treatment of employees and sustainability.
Younger consumers’ emphasis on what FMI refers to as “emerging” or “contemporary” notions of value is all the more striking given that millennials more than any other demographic group say getting good value has become more important to them over the past year (probably because they’re raising families now). So it’s not like they’re swimming in cash and can afford to indulge their passing fancies. Yes, younger consumers want to save money when they can (“getting the most for my dollar” is still the cornerstone of good value), but other aspects of value are increasingly important as well.
Another interesting finding is that younger consumers and households with kids, both of which have “more evolved notions of value,” are more likely to report having switched stores to better manage rising prices. While that may be concerning in the short term, “It also points to opportunities for retailers to support the needs and lifestyles of younger shoppers and those with kids with an eye toward building longer-term loyalty,” says FMI.
LOCK ‘EM IN NOW
These shoppers are heading into their peak spending years, so now is the time to lock them in by delivering value the way they define it. You may not be Walmart or Aldi, but that doesn’t mean you can’t be the store consumers turn to for value.