Millennials Want More From a Grocery Store

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Millennials Want More From a Grocery Store


08 July, 2011, by Carol Phillips

Millennial spending power has started to rocket. According to a press release by CampusAuction, “Millennial spending shot up 13% in 2010 to $306 Billion from $270 billion in 2009. This development was totally predictable and very likely to continue as more of this 70-80 million strong cohort gets a toe-hold in the job market and starts to advance.

Discretionary spending accounts for only about 22.5% of all spending, so it’s logical to presume that the bulk of the dollars are going to non-discretionary items like paying off student loans, food, housing and transportation. That may help to explain why there has been little market research on how Generation Y approaches buying the basics, like groceries.

Two years ago, IRI published findings that suggested Millennials are ‘impulsive shoppers‘ who are more likely to shop without a budget and are unafraid to purchase private label goods to save money: “Their acceptance of private label is much higher. Seventy percent of Millennials perceive store brands to be of ‘excellent quality.’” Yet their thrifty ways do not extend to clipping coupons and watching circulars: “Compared to their elders, Millennials tend to use less coupons and circulars.”

As intriguing as these differences may be, they don’t really help grocers or other retailers understand how to attract Millennial-age shoppers. Last week Kansas City-based advertising agency, Barkley, released findings from their study of Millennial shopping habits conducted in conjunction with BCG. According to Advertising Age, this study is one of the more comprehensive studies of Millennials they’ve seen outside of studies by Pew.

Among the key findings:

1. Millennials are more likely to prefer non-grocery store formats: 42% of Millennials say they shop at local or chain grocery stores compared to 55% of those 35 years or older.

2. Millennials see shopping as a social activity: ”Millennials prefer to be with others when shopping and often to so with family, spouses and partners, or friends.”

3. Millennials put greater value on shopping amenities: 60% of Millennials rate deli’s as a key criteria compared to less than 50% for older generations. Millennials are also looking for exotic foods, child-friendly stores, samples of new foods to try, creative menu ideas and online ordering systems. This appears to be a place where marketers can really win with Millennials – and possibly with everyone else as well!