Convenience remains consumer priority

Shopping at the supermarket may become less common if electronic delivery services take off.  |  File photo

Canadians are not spending any more money on food, so grocery chains are looking for new ways to draw in customers.

“We still have a stagnant population in this country that doesn’t spend any more on food than it did 10 years ago,” said John Scott, the retired head of the Canadian Federation of Independent Grocers who is now a private consultant with the retail food industry.

“We have smaller households and urbanization.”

During the annual Canfax Market Forum held in Calgary Nov. 27, Scott charted a list of trends among Canada’s largely urban population of shoppers who are looking for bargains at some stores and unique pur-chases at others.

Shoppers may go to Walmart for packaged goods while Costco, which offers a Canadian AAA beef in large quantities, is building a reputation for quality meat. They may also go to Safeway or Save On to buy high quality ready-to-eat meals.

“Each of those stores means something different to you. Each of those stores has developed a strategy they hope will do something for you,” Scott said.

Demographics are changing, and the technologically savvy children of baby boomers are shopping in a different way. They check prices and read labels on their smartphones before they leave home.

“We call them the spoiled kids of the eighties,” he said.

“We might have thrown pizza or doughnuts at them, but they are not doing that to their kids.”

Baby boomers still command a large share of the retail dollar, but the youngest are 47 years old. They are looking for more time, improved health, opportunities to socialize and good things for their grandchildren.

“Grandma isn’t going to feed the grandkids anything but the very best,” he said.

As well, 150,000 immigrants a year move to Canada, mostly from Asia.

The first newcomers built their own supermarkets rather than go to established outlets because they seemed foreign. Their children still shop at those stores because they offer something different.

There is also a wide economic chasm in the population: 10 percent have a lot of money and are accustomed to spending it on high quality products. Those with lots of money go to premium stores such as Sunterra in Calgary to buy restaurant quality meals and gourmet items.

The middle class is being squeezed, and that will continue. Sobeys, Safeway and Metro in Eastern Canada serve the middle class. Many of the stores are in the suburbs.

“The biggest issue we have is that the majority of the population does not have very much at all.”

They shop at discount stores such as No Frills and lower priced outlets such as Walmart and Superstore.

However, many who are not in the low income bracket also shop there because they appreciate a bargain.

The recession of 2008 had a major impact as people started to listen to the business news and became worried. They watched their money and started to buy packaged goods at the cheapest possible price.

Supermarkets dropped their prices, which would normally creep back up when the good times return.

However, consumers are still worried and they will not pay a premium price for packaged goods again.

Traditional supermarkets tried to match Walmart’s price for those goods. Those departments are now shrinking and retailers are offering more cheese, produce, dairy and meat because they make more money.

Food as medicine is also popular, and most stores now offer gluten free and peanut free products for consumers with allergies.

Gluten free products can account for 1.5 percent of all sales in high income areas.

“Health sells,” Scott said.

“Buy local” is a growing trend and often comes with a back story be-cause people feel more confident in the product if they know its source.

“It is not enough to know the ingredients. I want to know who stands behind it,” he said.

Another trend worth watching is whether more people will use the electronic delivery system from Amazon and Walmart to deliver food.

Scott predicts people will embrace it and that it will be more popular than expected.

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