Grocery remains the dominant channel, with 98.4 percent penetration during the 52-weeks ending June 27, 2010. Other leading channels include drug (77.0 percent penetration), mass merchandise (71.6 percent) and supercenters (69.5 percent). Supercenters enjoyed the largest penetration increase of 1.9 points, followed by dollar stores with a 0.5 point increase. Mass merchandise penetration decreased 2.3 points, while convenience store penetration declined 1.9 points and drug fell 0.5 points.
The number of shoppers visiting fewer than five stores has increased every quarter since the second quarter of 2009. In contrast, those shopping at 5-9 stores in the same timeframe has dropped every quarter but one. The number of people shopping at 10 or more stores has remained approximately the same.
Overall, trip frequency began to consistently decline starting in Q4 2009, and in Q2 2010, declined nearly 2 percent versus the same period the prior year, driven by declines in the convenience store and mass merchandise channels, which experienced slides of 9 percent and 7 percent, respectively. Across most other channels, average purchase occasions remained fairly steady.
Dollars per purchase occasion, which were growing at approximately 5 percent in Q3 2008 versus the same period the prior year, fell flat in Q3 2009 and are now declining by more than 1 percent. While grocery, supercenter and club channels have seen average basket size slide over the past year, convenience, dollar and drug stores enjoyed significant increases of 8 percent, 3.8 percent and 1.7 percent, respectively.
A majority of trip missions have seen total trips to retailers decline steadily for nearly all categories since Q2 2009. The exception is quick trips, or small “need it now” shopping excursions, which remained constant for the second half of 2009 and then jumped dramatically in Q2 2010. Similarly, basket size across trip missions has declined most quarters since Q2 2009. Once again, quick trips were the exception, consistently demonstrating increased basket size each quarter, beginning in Q3 2009.
Factors driving performance of these channels include:
- All retailers are instituting aggressive pricing, merchandising and promotion strategies to woo shoppers
- Channels known for low prices are tending to perform better
- Many mass merchandisers are shifting to a supercenter format, temporarily depressing trips and dollar share performance
- Convenience stores, known for carrying more discretionary items, are feeling the pinch as shoppers remain wary about non-essential spending
