Consumers are finding more and more goodies to tempt them at the supermarket, but many of them aren’t even edible.
This week, Aldi reached into Ikea’s bag of tricks and offered an upholstered chair in a box for $70, an ottoman for $40 and leaning bookshelf for $40. Cub Foods is currently selling freezers for $199. Hy-Vee’s newest Twin Cities stores entice shoppers with departments devoted to cosmetics, clothing and wellness supplements.
With so many nonfood items crowding the shelves, consumers can find nearly everything under the sun at the supermarket.
They are gravitating toward the edge of store where meat, dairy, produce and delis are placed, but also nonfood categories, according to Alexia Howard at AllianceBernstein global investment firm. Meanwhile, the center store area with cans and boxed goods has shrunk. Why?
It’s about opportunistic buying, said Paco Underhill, environmental psychologist and the author of “Why We Buy: The Science of Shopping.”
“The internet has taught us opportunity — that we can buy anything from almost anywhere,” he said. “People used to think they would only buy milk at the grocery store or convenience store and now they’ll buy it at a drugstore or a hardware store.”
That’s causing supermarkets to look for new ways to attract shoppers. Retailers such as Aldi have learned if they can get an aggressively good price on a desirable item, consumers will buy it, even if it’s an oddball thrown into the regular mix.
Kirby and Barb Hunt of Burnsville look specifically for the nonfood items in Aldi’s weekly flier, and they are regulars in the discount chain’s home aisle. On opening day Thursday at the new Aldi across from Burnsville Center, the couple had a $20 waffle iron in their cart.
“This aisle has good finds,” Kirby Hunt said. “We’d buy that chair if we needed it.”
The element of surprise keeps shoppers coming back, said Dave Brennan, a retailing professor at the University of St. Thomas.
“The idea is to get people in the store more frequently and then keep them there longer,” he said. Just as Target and Wal-Mart added groceries to get people to shop more often, supermarkets are now adding general merchandise for the same reason.
Aldi runs two pages of nongrocery items called “Aldi Finds” in its weekly ad, and the selection keeps expanding.
“In years past we would not have carried furniture,” said Matt Lilla, vice president of the store’s Faribault division. “We’re finding that we can sell just about anything.”
Aldi’s new, larger-scale Burnsville store — which at 12,000 square feet is a fraction of a 90,000-square-foot Hy-Vee — devotes an entire aisle to such home goods rugs, pillows, shelving, mattress pads, office chairs, writing desks, bookshelves and small appliances.
It’s a little bit like throwing things against the wall to see what sticks, said David Livingston, supermarket analyst in Milwaukee.
“They’re experimenting, trial and error, to see what works,” he said. “Aldi introduced Lacura cosmetics and that didn’t work so well, so they brought in a baby section.”
Groceries have always had a relatively low profit margin, especially in stores’ center aisles filled with cans and cartons of food. “Items that can spend five years on the shelf have the lowest gross margin,” Livingston said. “That’s why supermarkets want to steer them to higher-profit items.”
For the past two years, Cub Foods has run a promotion offering a freezer for $199. Customers also get a $50 gift card with the purchase.
“The freezer promotion is something Cub customers have enjoyed so we will continue to look for these out-of-the-box opportunities as they become available in the future,” said Mike Wilken, spokesman for Supervalu, Cub’s owner.
While buying a low-priced freezer at the supermarket might not seem as knee-jerk as snatching a bag of Dove chocolates off the shelf, they are both considered impulse buys at the supermarket.
“Consumers spending more per trip offsets lower traffic at the retailer,” said Brennan, the St. Thomas professor.