In its latest consumer research report, “The State of Grocery in North America,” McKinsey consulting identified several strong trends grocers should keep an eye on for the rest of 2023 and store brands are one of them.
The overall trends include increased economic pressure driven by inflation, increased digital engagement, additional pressures on profitability, continued upheaval in the labor market and sustainability becoming a more important part of business strategy.
McKinsey found saving money continues to be a priority across all income groups and 44% of consumers are planning to buy more private brands. In addition, 73% of consumers report that discounts have become more important in their grocery shopping decisions compared with a year ago.
In ecommerce, McKinsey’s survey reported convenience, in the form of time savings, delivery and more, was the overwhelming draw for consumers. However, shoppers were turned away by high delivery fees and a lack of personal contact with products in store. “Grocery retailers would likely need to enhance the online experience to boost ecommerce penetration further,” the study stated.
The report recommended grocers respond to these trends by focusing on an elevated personalized experience across channels for consumers; entering new categories and developing new sourcing strategies; using AI to better harness customer data; and McKinsey recommends grocers prioritize sustainability quickly to ensure longer-term success as it grows in importance to consumers.