Dive Brief:
- More than two-thirds (68%) of shoppers who participated in a recent survey conducted by Deloitte indicated they are willing to pay a premium for fresh food, a year-over-year increase of seven percentage points, the consulting firm announced Tuesday.
- A similar proportion (64%) of grocery industry executives polled by Deloitte said the fresh department is the most strategically important area for their sales growth plan during the next 12-36 months.
- While people are willing to spend more for what they feel is higher-quality food, cost concerns remain paramount, with 93% of the shoppers Deloitte surveyed saying price is their top purchase driver.
Dive Insight:
Even as price tops most shoppers’ agenda when buying groceries, that hasn’t stopped consumers from being willing to devote more of their budget to products they prefer, Deloitte’s research shows.
The findings laid out in a new report, “Fresh Food at the Intersection of Trust and Transparency,” indicate that consumers especially value fresh food. People who are willing to pay more for fresh products are open to spending 28% more for those types of goods than for frozen, canned or processed options, according to data the consulting firm collected from a July survey of 2,000 shoppers.
The researchers also found that consumers are willing to pay an even larger premium for sustainably produced fresh food. Participants in the survey indicated that they would be willing to spend an average of 30% more for these goods, but grocery executives said they believed shoppers would be willing to pay just 12% extra.
Deloitte’s data on grocery executives’ sentiment is drawn from a survey this summer of 100 executives at retailers with more than 10,000 employees.
Even as they expressed willingness to dig deeper in their wallets to get what they most value when shopping for groceries, consumers said they feel food prices have gone up excessively. The vast majority of participants in the study said they think they’re being asked to pay more than necessary at the grocery store, with higher prices going more to pad profits than to defray higher costs from suppliers.
Those findings are in line with research retail analytics firm Dunnhumby released earlier this year showing that consumers overestimated the rate of grocery inflation and retailers' profitability.
Consumers also told Deloitte that they feel grocers play a central role in making sure they have access to food that is safe. Thirty-seven percent of shoppers said they feel trusting a grocery store to ensure food safety is more important than brands (30%) or government regulatory bodies (24%).
In addition, shoppers place more trust in their primary grocery store than in other types of retailers, including clothing, convenience and department stores, and mass merchants, Deloitte reported.
“Understanding consumer behavior and preferences when it comes to organic, locally grown and sustainably sourced fresh food can help grocers differentiate themselves from the competition, not just on price, but as a trusted source of information,” Daniel Edsall, global grocer leader and principal at Deloitte, said in a statement.
Deloitte’s research also indicates that people want grocers to focus on their health. Eighty percent said they look for foods that provide nutrition profiles that reflect their individual needs, and 64% said they think fresh food can have benefits similar to medicine. Almost 40% of shoppers said they are willing to share some health information with grocers in return for personalized fresh food suggestions, Deloitte found.
