business news in context, analysis with attitude

It isn’t a surprising trend in view of the state of the national economy, but here are some numbers to confirm what most people have come to believe – increasing food costs are forcing consumers to make changes in how and where they shop.

New research for BIGresearch says that “Wal-Mart maintains a strong lead in the Groceries category among all adults nationwide (16% say they shop there most often) and is increasing competition for regional players.”

According to the study, “while shoppers in the Northeast head to Shoprite most often to stock their pantries, the grocer only saw a marginal increase in consumer share year over year (9.5% in May 07 to 10.1% in May 08), giving them a positive Consumer Equity Index™ (CEI)* of 106.29. #2 Stop ‘n Shop’s growth remained flat with a CEI of 99.09 while #3 Wal-Mart saw a substantial increase in share with an index of 126.40.”

(BIGresearch defines the “Consumer Equity Index” as measuring growth in share year over year…with 100 being flat. An index of 106.29, for example, indicates 6.29 percent growth, while an index of 126.40 indicates 26.4 percent growth.)

The study says that “Safeway tops the list for grocer shopped most often in the West; however, growth in consumer share remains flat with a CEI of 100.98. More shoppers are heading to second place Wal-Mart, evidenced in their positive CEI reading of 122.55. Wal-Mart maintains a commanding lead in the South as a quarter of all adults indicate they prefer to shop the big discounter for groceries. Wal-Mart also leads in the Midwest; 14.9% of shoppers who live there say the same … it appears that consumers are consolidating shopping trips, possibly due to high gas prices, as Wal-Mart is gaining consumer share in the Prescription Drugs category as well.”

KC's View:
On the “obviousness index,” about an eight.

There is no question that retailers are going to have to defend their turf using price and value as their primary weapons. But they also would be well advised to define value in a number of ways. Customers may be cutting back, but they will retain many of the same aspirations that they had before the economy hit the skids…and retailers that can figure out how to satisfy both impulses will have an advantage.