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4 Ways Your Grocery Store May Change In 2018

Melissa Anders, CONTRIBUTOR Opinions expressed by Forbes Contributors are their own.

Shoppers should expect to see more changes to their grocery stores over the next year as the industry adapts to new competitive pressures and millennial shopping habits.

The last year has been a trying one for supermarkets that face not only changing technology and consumer demands but heightened competition on price from giants like Amazon, which purchased Whole Foods in 2017, as well as growing discount chains.

“Overall, the traditional grocery retailer is being challenged by so many different entities this days, whether it’s the Amazons, whether it’s the meal kits, whether it’s Lidl and Aldi, the new discounters coming in, they have to react,” said industry expert John Karolefski of GroceryStories.com. “Traditionally, traditional grocers have been slow to react, but they’re starting to react now.”

Shoppers check out and get their groceries bagged during the grand opening of a Lidl grocery store, Thursday, June 15, 2017, in Virginia Beach, Va. Several Lidl stores opened across the nation in June. (AP Photo/Steve Helber)

The stores that survive will be ones that meet the expectations and desires of the changing consumer, Karolefski said, noting trends to watch for in 2018 include more online shopping options, mobile payment acceptance, meal kits and in-store drinking and dining.

Online options: Smart grocers will offer a variety of ways to purchase their products, including buy online for home delivery, order online for in-store pickup or curb-side pickup, he said. He pointed to Walker, Mich.-based Meijer, which offers all of these options. The supercenter chain this year began partnering with Shipt to deliver groceries to customers’ homes. This month Target announced it’s buying the grocery delivery service for $550 million.

Karolefski thinks curbside pickup will prove to be the most successful online grocery option since many people still prefer to see produce and meats in person before they buy.

“They want to squeeze the melon; they want to see the cuts of meat,” he said. “So you can order a lot of your grocery products, your center store items, the packaged goods online and have that waiting for you, but you can still go in to the store and pick up your fruits, vegetables and meats.”

Online grocery spending is projected to grow to 20 percent of the market, or $100 billion, by 2025, according to the Food Marketing Institute and Nielsen.

Payment technology: For the majority of customers who still shop in-store, supermarkets are looking to streamline the checkout process. Karolefski expects to see a rapid expansion in grocers that accept Apple Pay and other mobile payments in response to tech-savvy millennial shoppers. Business Insider reported this week that Cincinnati-based Kroger will bring its “Scan, Bag, Go” program to 400 stores in 2018. The service allows shoppers to scan items as they shop with a handheld scanner or mobile app then pay through a self-checkout or eventually through the app.

Meal kits: The $2.2 billion meal kit market, which includes companies like Plated and Blue Apron that send ready-to-make meals to customers’ doorsteps, represents a tiny fraction of the $1.5 trillion food industry, but it’s expected to grow between 25 and 30 percent in the next five years, according to food industry consulting firm Pentallect Inc. Another estimate by Packaged Facts places the market at $5 billion.

Kroger and Lakeland, Fla.-based Publix Super Markets have begun offering their own meal kits in stores, and Karolefski predicts more grocers will follow suit in 2018.

In-store drinking and dining: While super markets are expanding their online buying options, they still have a lot invested in brick-and-mortar stores, so they need to make them a more inviting place for customers to shop, Karolefski said. One way grocers are doing that is through in-store bars and dining areas. Pittsburgh-based Giant Eagle Inc.’s upscale Market District stores host events like food and wine Fridays, where shoppers pay $5 for a wine glass and can stop at stations throughout the store for wine samples and hors d'oeuvres while they listen to a three-piece band.

“The place is crowded, everyone’s having fun, and they’re grocery shopping,” he said. “It brings in shoppers, making the store a fun place to shop, and that’s what grocers have got to do, give them a reason to come to the store.”

https://www.forbes.com/sites/melissaanders/2017/12/29/4-grocery-store-trends-to-watch-in-2018/#6f3827f048ef

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