When considering new and flexible retail formats for grocery shopping, specific preferences emerge when it comes to particular online delivery options, according to Nielsen’s 2011 Global Online Survey of more than 25,000 Internet respondents across 51 countries. While more than half (52%) of global online consumers say they are likely to place a grocery order online if it is delivered to their homes, less than one-third feel the same if they are required to pick up the online order curbside (27%) or via a drive-thru window (30%). Interestingly, more consumers—just over one-third (36%)—say they are willing to pick up an online order inside the store.

The online shopping/home delivery option is most embraced by consumers in Asia Pacific, where more than three-quarters (77%) say they are likely to take advantage of this option, which contrasts sharply with one-fifth of North Americans (20%) and one-third (35%) of Europeans. “The main resistance in developed countries in Europe and North America is primarily due to the high volume of grocery stores that are available,” said Jean-Jacques Vandenheede, Director Retailer Industry Insights, Nielsen. “In Asia Pacific, fewer physical stores and a very digital consumer base equal a fertile distribution channel for online.”  About half of respondents in Middle East/Africa (48%) and Latin America (51%) indicated they are likely to shop for groceries online for home delivery.

Using hand-held scanners to record purchases while shopping to avoid waiting on checkout lines was welcomed by half of global online consumers. While interest is again highest among Asia Pacific consumers (60% interested and only 14% unlikely to try it), in each region, more consumers indicated they are likely to try it than not.

For more detail and regional insights, download: Shopping & Saving Strategies Around the World.

By far, North Americans are the mostly likely to make a shopping trip to stock up on groceries, with 60 percent of North American consumers indicating their primary reason to make a trip is to stock up on staples. By contrast, 18 percent say they make a trip to pick up a few items, and just seven percent say they shop when they run out of something at home. “The impact of high gas prices in the U.S. has prompted consumers to combine errands and trips,” said Hale. “This trip consolidation has resulted in a reduction in small grocery trips in the U.S.”

A more even distribution of shopping trip missions is reported in Europe, where 37 percent say they stock up on grocery trips, one-in-five (21%) shop when needing a few essential items, and 25 percent make a quick shopping trip when they run out of something at home. “Retail trip missions in Europe are dictated by store infrastructure,” said Jean-Jacques Vandenheede, Director Retailer Industry Insights, Nielsen. “In countries where shoppers have a high density of stores to choose from, such as in Italy or Germany, shoppers tend to shop more often. In countries that are dominated by hypermarkets with less retailer availability, stocking-up is the more dominant shopping pattern.”

Conversely, stocking up for groceries is less common in Asia Pacific, Latin America and in the Middle East/Africa where roughly one-in-five consumers say that is the primary reason for the shopping trip. Across both the Asia Pacific and Middle East/Africa regions, about one-third of online consumers say a quick trip for needed items is the primary reason for shopping trips (32% and 33%, respectively). A similar, but slightly smaller, number say trips are made to purchase a few essential items (28% of trips in Middle East/Africa and 29% of trips in Asia Pacific). Similarly, in Latin America, the most commonly reported reason for making a shopping trip among one-third of respondents is to pick up a few essential items and one-quarter say they make a quick trip to replenish.

For more detail and regional insights, download: Shopping & Saving Strategies Around the World.

Reported use of coupons is greatest in North America (65%) and Asia Pacific (55%). The United States (66%), China (67%) and Hong Kong (65%) are the three leading markets for reported coupon use as a way to save money.

“About 80 percent of U.S. households use manufacturer coupons across all retail outlets, which is up slightly from 2009 to 2010,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen. “But coupon usage is concentrated—70 percent of 2010 manufacturer coupon purchases came from just 13 percent of coupon-using households. These coupon enthusiasts are big spenders across the total store and are young, more affluent and have large households.”

“In China, 35 percent of hypermarket sales in key cities are sold on promotion—a stable contribution over the past two years,” said Peter Gale, Managing Director Retail Sales, Nielsen Asia Pacific and Greater China. “In most Asian countries, simple price cut promotions are the main promotional vehicle supported by direct mail leaflets and newspaper advertising.”

While 38 percent of European consumers indicate using coupons to save, there is wide variation within the continent. While at least half of consumers reported coupon use in several western and southern European countries, such as Belgium and Portugal (63%), Greece (55%), France (53%), and Spain (50%), in other markets, particularly in northern and Eastern Europe, coupon use is much less prevalent. “Belgians are the record holders in terms of coupon redemption, but in countries like Germany or the Netherlands, their usage is very marginal,” said Jean-Jacques Vandenheede, Director, Retail Industry Insights, Nielsen Europe. “Many retailers in Europe are rather reluctant towards that practice.”

In Latin America and in Middle East/Africa, reported coupon use is much less common as a saving strategy. Only 25 percent of consumers in Latin America and 18 percent of respondents from Middle Eastern/African markets report using coupons. “In the Middle East, price cuts is the most popular promotional vehicle used by retailers along with volume discounts,” said Bassel Adel, Director Retail Services, Nielsen Middle East, North Africa, Pakistan. “However, consumers are gaining a greater awareness of leaflets, which are driving store visits and prompting retailers to actively advertise promotions in newspapers.”

For more detail and regional insights, download: Shopping & Saving Strategies Around the World.

To get a better sense of where the fast moving consumer goods industry stands – and where it’s going – in Asia Pacific Nielsen has released its comprehensive mid-year report highlighting regional trends such as total FMCG category growth, the role of hypermarkets and the changing gender profile of shoppers as well as country highlights on retail trends in 14 key nations.

FMCG Growth
Volume growth in the industry was down across many Asia Pacific countries as consumers cut back during the recession.  But there were some standouts: India and Vietnam posted value sales rises of nearly 15%.  In China, where value sales had been posting double-digit gains for much of the decade, growth slowed to just 3% in 2009.  But thus far in 2010, the segment has rebounded nicely, with 11% in the sector in the first quarter of the year.

Modern vs. traditional
The traditional retail trade, both wet markets and counter service mom & pop stores, continues to play an integral role throughout much of Asia.  Even in countries experiencing rapid growth such as China, Vietnam, Indonesia and Malaysia, the wet market continues to be the main place for buying fresh food.  But modern grocery stores, such as hypermarkets and convenience stores are now an established presence in most urban areas, with the strongest growth for such formats seen in China and Korea.

Modern channels have continued to grow steadily and now account for 53% of all packaged grocery sales in the region, up from just 35% in 2000.  But that trend varies widely: almost all packaged grocery shopping was done in the modern market in Taiwan and Singapore (94% and 92%, respectively) while in India, just 5% went through self-service outlets.

China has been the most dynamic country over the past decade, with the modern trade growing from 34% in 2000 to 64% in 2009, the fastest retail ever seen with Korea fast on its heels, expanding from 63% in 2000 to 86%.

Format Wars
The expansion of hypermarkets has been a boon for many shoppers, especially those in urban areas.  Today, this format is the strongest modern trade channel, accounting for 28% of packaged grocery sales in China.  In Shanghai, 77% of shoppers use hypermarkets as their main store, while in Beijing, 45% do the same.  In Korea, the channel accounts for 31% of trade.  Meanwhile, in Southeast Asia, Hypermarkets are strongest in Thailand with 90% of urban shoppers using them regularly, there has also been significant development in Malaysia where nearly 40% of shoppers spend most in this format.

In many of these countries, the traditional grocery store has been in slow decline as it has faced increased competition.  In Korea, the traditional channel posted a closure rate of 5% per year, accounting for more than 50,000 store closures over the course of the decade.  Although the hypermarket is making huge gains in Malaysia, most shoppers (over 70%) still visit traditional grocery stores two to three times a week. Asian shoppers now have a wide portfolio of alternative shopping channels to meet different shopping needs and occasions including both traditional and modern stores.

Any visitor to Asia will notice the surge of small format stores, both convenience stores and mini-marts, with some intersections boasting two or more such stores on the corner.  Convenience stores such as 7-Eleven, Familymart and Circle K have continued to grow strongly throughout the region, with shoppers attracted by their convenient location and food service offer.

Indonesia has seen explosive growth in mini-markets, small modern grocery stores, with local chains leading this change.  With just 2,000 such stores at the start of the decade, the nation now boasts more than 11,500, and this channel’s now accounts for more than 17% of grocery sales.

Tapping the Potential of Private Label
In North America and Europe, private label goods have experienced strong growth, especially during the recession.  What’s more, consumers in those regions say that they expect to continue buying private label goods even after the recession is over.   The story is very different in Asia.  The private label concept has yet to make a significant dent in sales, and only in Hong Kong do they have above 5% share of sales.  Retailers across the region have been investing in the development of Private Labels but still have a lot of work to do to convince shoppers of the quality and value of these products compared to leading brands.

What’s Ahead
The changes shaping the retail scene in Asia Pacific go beyond store size and format.  Nielsen has identified a number of trends that will affect retailers and manufacturers in the next decade, including:

• The growing role of the male shopper – Tradition still leads the way in most countries in the region, but an increasing number of men are becoming involved in grocery shopping.  Only in India and Indonesia do housewives dominate, and Korea and Vietnam also still strongly adhere to traditional roles.  Across the region, 22% of the “main” grocery shoppers for households are now male, up from 14% a decade ago.

While there are signs of change in Korea, likely driven by the development of Hypermarkets, only 11% of men claim to be the main shopper for their families.  In Vietnam, the percentage is likely to stay low for a while as long as the traditional Wet Market channel continues to dominate packaged grocery sales.

• Hypermarket growth stalls as multi-format strategy gains – Smaller formats that offer shoppers a more convenient way to “top-up” shopping have gained in popularity, many being opened by the leading hypermarket chains themselves.
• Shopping outside the store – Shopping done via the TV or Internet is gaining traction in Asia Pacific, with Korea leading the online shopping sector.   Koreans have embraced this “format,” with 4% of shoppers saying they use the Internet for the majority of their grocery shopping and 71% saying they use it regularly to purchase groceries and personal care items.  An additional 30% say they use TV shopping.

These and other trends are discussed in the 2010 APAC shopper trends report.

The average household has increased overall spending in these categories by 14 percent, with fresh food spend registering an average of 15 percent growth, with the biggest increased among high-income households.  Seventy percent of Singaporeans survey said they changed the way they spend their money with a view toward increasing savings.  Almost 75 percent of shoppers said that they now “buy only the essentials” and were making fewer purchases of chocolates, carbonated soft drinks and salty snacks.  Basics such as rice, bread, cheese, butter/margarine and infant milk were some of the fastest growing categories.

“Modern day Singaporeans lead hectic lifestyles and are generally tight for time, and convenience is the key driver when deciding where to shop.  Supermarkets and hypermarkets meet their needs as shoppers are now able to get all of their fresh food, grocery and household needs under the same roof,” said Ooi Pin Pin, associate director, retailer services for Nielsen Singapore.   As a result, these outlets have seen their sales of fresh foods post solid growth, while traditional wet markets have continued to decline.

Read the full press release on how Singaporeans are changing how they shop for food here.

Year-over-year growth at hypermarkets reached 6% during the period, while the smallest convenience outlets declined by almost 2% during the 12-week period.

In comparison, year-over-year growth in the British grocery sector stood at 3.2% during the 12 weeks ending 29 November, according to Nielsen.  Grocery multiples showed stronger growth (+5.6%) during the period.

“In order to save money shoppers are making less visits to grocery stores,” Mike Watkins, senior manager retailer services, Nielsen, noted.  “Nielsen has identified that virtually every major food retailer saw the number of visits per shopper fall in November versus a year ago and the big casualties are those retailers that people visit to do top up, small basket, and indulgence shops.”

According to Nielsen, there are exceptions to this trend.  Retailers like Morrisons and Asda, and value retailers like Iceland drew plenty of shoppers — and even showed accelerating sales in the most recent 12-week period. 

View the press release.