Reducing expenditure on groceries remains a top priority for consumers across all income groups, a new study has found.
The 2023 Grocery Retail Industry Update by global advisory firm Stout found that private label and discounted products retained their popularity among shoppers as they continue to stretch their dollars.
The significance of a technology-driven, engaging shopping experience continued to rise, particularly among younger demographics, indicating they seek destinations, not stores.
Nearly three-quarters (75%) of Gen Z and Millennial shoppers used a grocery store app in the past year, the data showed.
Other Findings
Labour shortages emerged as the biggest challenge facing the grocery retail industry, according to CEOs, the study noted.
In early 2023, around 44% of frontline retail workers were considering leaving their jobs, but this rate declined significantly into the second half of the year.
Rising labour rates have prompted grocery retailers to investigate cost-saving investments, ranging from self-service checkout lanes to fully automated, cashier-less stores, according to the report.
Retailers have also expanded their product assortment to meet consumer preferences, including increased demand for private-label, plant-based, organic, and better-for-you products.
Food Waste
With food and packaging waste reduction a top priority for shoppers and companies, grocers and CPG firms focused on reducing waste.
Apps like Too Good To Go gained popularity amongst consumers, restaurants, and grocery retailers as they helped fight food waste in a seamless, cost-effective manner, the report noted.
Vulnerable To Disruption
A separate study by AlixPartners has found that the retail sector is the most vulnerable to disruption out of ten major industries.
AlixPartners’ Disruptive Index surveyed 3,000 C-suite executives around the world, collecting responses across ten different industry sectors.
