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Millennials: Grocers’ Loss, C-Stores’ Gains?

Younger shoppers spreading food purchases across new options

CHICAGO -- Grocers are struggling to lure millennials into their aisles amid what experts say is a permanent shift in shopping patterns among consumers, according to a Wall Street Journal report.

Shoppers in their 20s and 30s are visiting supermarkets less frequently than their parents, the report said, citing government records and survey data. They are spreading purchases across new options, including online grocery services, convenience stores and stronger food offerings from retailers such as Wal-Mart and Target.

“I don’t think we’ve seen shopping change so dramatically ever,” said Marty Siewert, senior vice president for consumer and shopper analytics for Nielsen, to the Journal. “Those things in the past that have been real drivers for grocery in terms of freshness and quality aren’t the key drivers for millennials.”

Consumers 25 to 34 years old last year spent an average of $3,539 on groceries, about $1,000 less in inflation-adjusted dollars than people that age spent in 1990, federal data shows. On average, consumers overall bought $4,015 in food for their homes last year.

Sales at food and beverage retailers rose 3.7% from 2002 to 2007, an analysis of U.S. Census figures by A.T. Kearney shows, while they grew only 2.4% annually from 2008 to 2013.

Aging baby boomers also have cut back on grocery-store spending, federal data shows.

Burt Weiss, a baby boomer from St. Louis, said he has slashed thousands of dollars from his grocery bills in his later years by scouting for sales, shopping discount retailers like Aldi and hitting convenience stores on occasion.

“The object is to eat well for as little as possible,” Weiss told the newspaper.

There were 1.4 million restaurants and grocery stores in the United States last year, up from half a million in 1985, the report said. Dollar and convenience stores accounted for 81% of the 6,588 food retailers that opened from 2013 to 2015, Nielsen TDLinx figures show.

To win over the key young consumer group, some supermarkets are testing smartphone apps that customers can use to place their orders in advance, and introducing new product lines, the report said. Also, grocers are joining with third-party services such as Instacart Inc., Shipt and UberRush to reclaim millennials before they drift further to Amazon or other delivery services.

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