Dissecting Consumer Dynamics Across Channels And Categories

Dissecting Consumer Dynamics Across Channels And Categories

American shoppers have a huge range of options when choosing where to shop, from convenience and dollar stores to traditional grocery and drug stores to warehouse clubs and supercenters.  Who shops where? And what are they buying?  These are just a couple of the questions answered by Nielsen’s “U.S. Consumer Dynamics Across Channels & Categories” study released earlier this month.

On a dollar volume basis, grocery stores continue to capture the highest percentage of consumer dollars, with 33.1 percent.  In Grand Rapids, Michigan, groceries capture almost 50 percent of the consumer spend, while in New Orleans grocery stores account for just over 20 percent.

Dollar Volume By Channel

Warehouse club stores are a major force in Western states, with the greatest percentage of consumer spend in San Francisco and Seattle.  In fact, of the top 10 markets for warehouse club store sales, nine are located in the west.  Meanwhile, warehouse clubs have the lowest percentage of share in Louisville and Columbus.  Across the U.S., drug stores capture about 3.8 percent of consumer spending, but in Cleveland, they make up almost 9 percent, while in Denver, they make up less than 2 percent.

Club stores skew to high-income households, while dollar stores, supercenters and drug stores attract a greater percentage of sales from lower income households.  Household has kids are more likely to spend their money at mass merchandisers, super centers and club stores.

The top three categories skewing to high income households are wine, diet aids and floral/gardening, while large households are buying disposable diapers, baby food and frozen juices and drinks. Seniors skew toward vitamins, medications/remedies and canned fruit, and households with teens skew towards sanitary protection, ethnic health and beauty products and gum.

In the last year, most channel penetration trends remained stable.  Supercenters saw the greatest increase, 2.4 percent on a year-to-year basis, while mass merchandisers saw the greatest decline, with a 2.9 percent loss. More interesting is a look at how channel trends have changed over the last 12 years:

Percent of U.S. Households Shopping: 2008 vs. 1997

U.S. Channel 2008 1997 Change
Grocery 99% 100% -1
Mass Merch w/ Supers 95% 97% -2
Supercenters 68% 52% 16
Mass w/o Supers 79% 94% -15
Drug Stores 81% 89% -8
Warehouse Clubs 50% 48% 2
Conv/Gas 40% 52% -12
Dollar Stores 64% 45% 19
Source: Homescan® Channel Facts, CY 08 vs. CY 97

“As consumers change their spending habits, both retailers and manufacturers are finding growth and profit opportunities by adapting their merchandising strategies to the changing retail landscape,” said Tom Pirovano, Director, Industry Insights at Nielsen.

Other subjects examined in Nielsen’s report were:

  • Other channels (e.g., apparel stores, home improvement, electronics) and their average spend per trip
  • Categories with the broadest appeal across demographics
  • Categories with the highest buying rates and purchase frequencies
  • Categories with the highest percentages sold with manufacturer coupons
  • Food and beverage sales outside the traditional grocery channel