Large chain grocery stores failing to deliver: LoyaltyOne Survey Finds
TORONTO, May 28, 2015 /CNW/ - As retailers gear up for the peak "buy local" season, a recent survey reveals that six in ten (61%) Canadians say purchasing local food and beverages is important to them, and nearly half are willing to pay a 15-30% premium for them. Furthermore, among these shoppers, 87% report they would increase their monthly grocery spend if local alternatives were more readily available.
When asked what prevents them from buying more local goods, higher price, surprisingly ranked as the lowest obstacle at 23%. This compares with 60% who say the largest impediment is the fact that large chain retailers are not stocking a wide enough selection of local goods. Other top barriers to buying local include homegrown foods not being properly promoted in-store (39%), and therefore difficult to locate, and confusion over identifying local products by their packaging (36%).
"Local products are a driving factor among many shoppers across the country. Not only do these products represent an opportunity to grow basket size, they appeal to a potentially large shopper segment that is already in your store and willing to pay a premium. It's incumbent on the retailer to use data to understand what drives this segment. Retailers should structure their pricing to align with the value that consumers place on local products and make certain it's easy for shoppers to identify what is local when shopping," says Graeme McVie, General Manager and Vice President of Business Development for Precima, the data analytics arm of LoyaltyOne.
Of note, the survey revealed that 72% of those who purchase local products gave supporting their local economy/business as the primary reason.
When asked to rank the importance of purchasing locally sourced products, fruit and vegetables top the list with 98% of local shoppers saying it is very to somewhat important that they are produced and/or sourced locally, closely followed by meat, 90%. Beer and wine ranked 38% and 35% on the importance scale, respectively. A correlation was also found when it comes to the premium these shoppers are willing to pay.
| Food Categories |
% of Canadians |
% of Canadians |
% of Canadians |
| Fruit & Vegetables |
98% |
48% |
15% |
| Meat |
90% |
49% |
17% |
| Beer |
38% |
28% |
8% |
| Wine |
35% |
33% |
10% |
When it comes to local product selection and promotion, 91% who value local say farmers markets rank number one, followed closely by independent grocery stores at 71%. Whereas, less than half of those who value local products (46%), say big chain grocery stores are doing a good job at stocking and promoting these products.
"We've known for some time that local is an important movement economically and socially. Getting local right is not just a nice to do, it's vital for retailers looking to drive incremental margin and loyalty; this is true for many retailers, especially large-chain grocery stores who stand to make the most by closing the gap. Sourcing local is only the beginning of the puzzle, it's how you present the value that is going to make the real difference to the local economy, to your shopper and to your bottom line," adds McVie.
Survey Methodology
LoyaltyOne conducted an online survey of 1,646 Canadians in May 2015. Survey respondents were at least 18 years of age and had primary or shared responsibility for the grocery shopping in their household. The margin of error is +/- 2.42.
About LoyaltyOne
LoyaltyOne is a global leader in the design and implementation of coalition loyalty programs, customer analytics and loyalty services for Fortune 1000 clients around the world. LoyaltyOne's unparalleled track record delivering sustained business performance improvement for clients stems from its unique combination of hands-on practitioner experience and continuous thought leadership. LoyaltyOne has over 20 years history leveraging data-driven insights to develop and operate some of the world's most effective loyalty programs and customer-centric solutions. These include the AIR MILES Reward Program, North America's premier coalition loyalty program; a majority stake in European-based BrandLoyalty, one of the largest and most successful campaign-driven loyalty marketers outside of the Americas; and a working partnership with Latin America's leading coalition program, dotz. LoyaltyOne is also the owner of COLLOQUY, a group dedicated to research, publishing and education for the global loyalty industry.
LoyaltyOne is an Alliance Data company. For more information, visit www.loyalty.com.
SOURCE LoyaltyOne
Stacey Marson, LoyaltyOne, [email protected], 416.552.2834; Natasha Boeck, 416.969.2724
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