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Menards, for example, now devotes about six aisles to groceries as well as a refrigerated section with pizza, milk, cheese and eggs. At Walgreens, food and beverage items now make up 20 percent of the merchandise with plans to allot more space, said Jim Jensen, divisional vice president. “Food, along with beauty and health items, gets customers to visit the store more often and buy more,” he said.
In the past, traditional supermarkets relied on coupons to accomplish the same thing — get customers to buy more. Cub’s acceptance of expired coupons and Rainbow’s doubling on Saturdays have been big draws. But that strategy holds less appeal for shoppers today. Redemption was down 17 percent nationally in 2012, which Lempert describes as a paradigm shift rather than a blip.
“People perceive value differently now,” he said. “In the recession, they discovered places that didn’t accept coupons like warehouse clubs or liquidators where the prices are low enough that they didn’t miss them.”
Still, low prices, with or without coupons, are no guarantee of attracting harried shoppers. “Consumers are looking not only at their wallet, but also the clock and the gas gauge,” Underhill said. “They don’t always need to choose from 15 types of pasta in a supermarket. Three is enough when you’re time-crunched.”
Indeed, it can be quicker to pick up milk and eggs while you’re already getting paint at Menards, gas at SuperAmerica, or a prescription at Walgreens or CVS.
With the competition adding food to increase sales and store visits, Rand said, traditional grocers are going through another phase of their life cycle. Analysts are waiting for them to find a new path to revitalize and strengthen them.
“They’re going through a difficult patch,” he said. “But it’s way too soon to write them off.”
John Ewoldt • 612-673-7633