Consumers are increasingly adding to their grocery shopping basket at the pharmacist, hardware store or online.
Lately we’ve been getting a lot of questions and comments about cross-category competition. Market share measurement is no longer limited only to what’s happening within a specific category, but in identifying how brands from other categories are exposing customers to non-traditional purchases.
During the ACCC Supermarkets Inquiry, Coles CEO Leah Weckert declared that Amazon alone had taken more than $1 billion of grocery retail away from the supermarkets since 2017, then later revealed that Coles had lost more than $500 million of sales directly to competitors such as Chemist Warehouse, Bunnings, and others.
For consumers, the choices and variety offered at retailers is immense; Need household cleaning or laundry products? You can’t escape the hardware store checkout without being faced with a wall of merchandise. Toilet paper? Go online to bulk-buy, or visit your local Pharmacy. Even Barbeques Galore now sell meat, alcohol and pet food which is a clear departure from their traditional offering. For the average consumer however, they are less concerned about the preferences of retailers and more concerned about convenience, value and rewards.
In order to validate what we’ve been hearing in market, Fonto polled its members in March and April to get a sense of what’s happening with the migration of grocery shopping baskets to other categories. We learnt that over the last 12 months, a higher proportion of shoppers than expected have bought staple household products from retailers other than supermarkets:
- 25% toilet paper
- 27% laundry detergent
- 40% household cleaning products
- 62% pet food
Key drivers for the alternate shopping choices included convenience (“I was already there”), the opportunity to bulk buy, and home delivery. Home delivery was an interesting driver given that it is readily available from supermarkets, and worth further investigation by brands looking to capitalise (or stem the loss) on cross-category migration.
For laundry detergent, price and promotion played a large factor in purchases made outside of supermarkets, along with bulk-buying opportunities.
In pet food, price & promotional offers are a key driver outside of supermarkets, but interestingly so too are loyalty programs offered by non-grocery retailers. This is potentially a perfect combo for acquiring and retaining customers in the pet food space.
Fonto are conducting analysis to help retailers, manufacturers and equity research firms better understand how consumers are shifting staple products into and out of their supermarket shopping basket.
For more information or to share your point of view, reach out to the Fonto team.
