4 Grocers That Are Grabbing Budget-Conscious Consumers
Published on October 2, 2015
Price continues to be a competitive differentiator for grocers. Forty-five percent of consumers who stopped shopping at a given supermarket did so in search of lower prices, according to a 2015 Consumer Reports survey. The survey also found that only 60 percent of consumers were completely or very satisfied with their store's prices.
The demand for less expensive groceries is paving the way for reasonably priced supermarkets to grow their footprints across the country. What’s also noteworthy about these grocers is that many of them are fresh-format grocers, one of the industry’s fastest growing segments. Willard Bishop forecasts that by 2018, fresh-format grocers will increase their store counts by nearly 63 percent and increase sales by 92 percent.
Here are some price-conscious grocers to watch.
Trader Joe’s. Trader Joe’s is known as a go-to purveyor of unusual, organic, and gourmet foods at reasonable prices. The retailer has grown to over 450 stores coast to coast and continues to open new locations at a rapid clip. Recently opened or announced locations include Davie, Fla.; Hoboken, N.J.; and Oklahoma City. Trader Joe’s anchors four Phillips Edison centers, including Coronado Center in Santa Fe, N.M., Trader Joe’s Center in Dublin, Ohio, The Shops of Uptown in in Park Ridge, Illinois and Hilfiker Square in Salem, Oregon.
Aldi. Much of German-based Aldi’s success is due to its limited assortment of high-quality foods. It can buy its inventory of about 1,300 staples at higher volumes and pass the savings on to consumers. Aldi continues to grow in the U.S., with plans to open 45 stores in California in 2016. Aldi anchors three Phillips Edison shopping centers, including Upper Deerfield Plaza in Bridgeton, N.J., Commerce Square in Brownwood, Texas and Emporia West Shopping Center in Emporia, Kansas.
Sprouts Farmers Market. Sprouts is a specialty grocer that has grown considerably since its blockbuster $333 million IPO in 2013. Its store count is at 200 and growing—Sprouts announced it will open 12 locations in Q1 2016, including in California, Georgia, Colorado, Texas, Tennessee, and Missouri. The grocer anchors four Phillips Edison shopping centers, including Arcadia Plaza in Phoenix; Broadway Plaza in Tucson, Az.; Kirkwood Market Place in Houston; and Spring Cypress Village, also in Houston.
Fresh Thyme. The emerging grocer stocks a core offering of reasonably priced, fresh produce, in addition to other healthy and organic foods. Fresh Thyme has concentrated its growth in the Midwest. It will be opening three locations in the Chicago area on Oct. 14, which are part of 60 stores the grocer is planning to open by 2019. Phillips Edison’s Beavercreek Towne Center in Beavercreek, Ohio, is anchored by Fresh Thyme.
Consumers are on a quest for not only the best-priced groceries, but the best-priced groceries that are also fresh, healthy, and organic. Supermarkets that combine these benefits are well-positioned to appeal to the modern consumer.