PORTLAND, Ore. – Supermarkets are facing a crisis as a tough economic climate and changing shopping habits have been eating away at their bottom line, The Oregonian reports.
The problem has been exacerbated by soaring wholesale foods costs in recent years and unexpected competition, such as from Amazon.com adding dry goods basics to their product lists. Also contributing to the shrinkage of supermarket sales are Wal-Mart and Target expanding grocery sections at specific locations, and convenience stores selling whole fruit and salads, among other fresh products.
All of that has adversely impacted grocery stores. In 2009, sales at the top 10 U.S. food retailers dropped around 1.2 percent to reach $606 billion, according to Supermarket News. Many stores have not seen a drop in traffic, but those customers are buying fewer items.
Supermarket sales are declining mostly because consumers are searching for the lowest price. Shoppers stop by three to five stores each week in search of bargains, as opposed to two or three stores weekly prior to the recession, said Shelley Balanko, vice president of ethnographic research at Hartman Group.
“Twenty or 30 years ago, women would shop at one store. Today we shop around. That’s been going on for a long time but accelerated in the recession,” said Tom Gillpatrick, executive director of Portland State University's Food Industry Leadership Center. “In addition, consumers are more precise in what they're looking for. They're relying on lists more and they're using coupons.”
To recapture consumer interest, grocery stores appear to be relying on initiatives that give shoppers steep discounts on particular items each day. However, what customers do like are coupons, in-store food samples and free product, said Balanko. What customers don’t really like are loyalty-card programs and everyday low prices.
When the recession lessens, customers will return to some of their former shopping habits. “People will loosen up,” said Gillpatrick. “They're not going to go back to where they were. They'll continue to be more aware of what they're buying.”