Please ensure Javascript is enabled for purposes of website accessibility

Supermarkets May Have a Millennial Problem

By Daniel B. Kline - Dec 14, 2017 at 9:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The generation does not have the same opinion on grocery shopping as Baby Boomers or even Generation X.

The idea of getting into a car and heading to a supermarket seems a bit outdated. It's habit for anyone over 30, but for some younger folks, it may seem as odd as renting a videotape or setting up an answering machine.

In the age of meal-preparation kits being delivered to your door, same-day delivery via Instacart, and an increase in restaurants offering delivery, supermarkets risk becoming as outdated as the evening news. That may be something the industry can avoid, but currently Millennials rate supermarkets lower than Baby Boomers and Generation X across all categories in the Retail Feedback Group's (RFG), 2017 U.S. Supermarket Experience Study.

A shopping cart is seen in a supermarket aisle.

Younger people are less likely to have a positive view of supermarkets. Image source: Getty Images.

What are Millennials saying?

It's bad news when the age group that's now the largest generation does not view your type of store positively. That's the case in the supermarket space as Millennials gave supermarkets lower scores than older generations on RFG's report.

"The fact that overall trip satisfaction and all of the core experience factors register lowest among Millennials should be a call to action for supermarkets," said RFG Principal Brian Numainville in a press release. "Traditional supermarkets must find ways to make the supermarket more appealing and relevant to younger shoppers or risk becoming endangered as Boomers age and purchase less."

A chart shows how each age group feels.

Image source: RFG

A loss of relevancy

While Millennials have the poorest view of supermarkets, it's worth noting that Generation X -- roughly the generation born from early 1960's to late 1970's -- rates Supermarkets lower than Baby Boomers in every category except "Staff knowledge/helpfulness" where there was a tie. This suggests that the younger the person, the less likely they are to see the appeal of supermarkets.

That news should concern the various chains operating in this space because it makes the results harder to dismiss. If Millennials were alone in having a lesser opinion of supermarkets that could be passed off as many of them not yet having families or as much need to buy groceries.

The Gen X results, however, suggest that the growth of shopping choices may be negatively impacting supermarkets. For a consumer comfortable ordering groceries through Amazon via Instacart or through countless other services (even things like Wal-Mart's curbside pick-up) the bar for stores gets higher. It's not that Millennials and Generation X members won't shop in supermarkets, but many will hold them to higher standards because they fully understand their choices.

What can supermarkets do?

Clearly, many supermarket chains need to improve the customer experience. That involves everything from training staff better to improving store layouts and adding technology.

"When people shop in a supermarket, the overall experience, assortment, and value proposition need to be excellent in order to earn their next visit," said RFG Principal Doug Madenberg. "There are too many grocery options available online, in hard discount stores, and across other formats, for an average or sub-par supermarket visit to be acceptable."

As has been the case in so many other areas of retail -- as well as in wireless, television, and other markets -- the key change is putting customers first. That could be as simple as laying out stores for convenience so customers get exposed to more shopping opportunities or as complicated as offering apps that take the pain out of the shopping process.

There's no one simple answer for supermarkets, but continued relevance in the digital era requires change. These chains need to give customers a reason to visit -- something extra they get from shopping in-store -- or else Millennials may never adopt the shopping habit of regular supermarket trips like their parents.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$124.10 (0.31%) $0.38
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$113.38 (-2.65%) $-3.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.