Millennial shoppers: How are they impacting the grocery retail landscape?

Millennial purchasing behavior greatly impacts the current retail landscape, and retailers, having realized this, are making Millennials their prime focus. Millennial shoppers are distinctly different from older generations as they are more racially diverse, more educated, and technologically-abled. Most of this demographic group are passing through the initial phase of their respective careers and are single or are starting their own families. Their grocery shopping habits are likely to change with time, but current differences from older generations could have implications for future food demand.
Millennials are price-sensitive but place preference for personalized offerings. However, they are ready to shell out money if the quality of the products is worth the amount. Furthermore, millennials are also fast in acclimatizing themselves to new technologies and are embracing newer grocery options such as online ordering/delivery and meal kits while navigating in-store and digital channels. They are demanding healthier and fresher food, including fruits and vegetables for at home preparations, but place a higher preference for convenience as compared to other generations.

Millennials Purchase More Prepared Foods

Millennial shoppers generally purchase a larger share of prepared foods such as pasta, sugar, and candies than the other generations. Prepared foods such as foods that are ready to heat and eat or just ready to eat such as canned soup, frozen pizza, sandwiches, pasta, salads, and rotisserie chicken. They also devote a part of their share of at home food preparation expenditures to grains, poultry, and red meat. The prepared foods require minimal preparation while grains and meats require cooking.
In comparison to GenX households, Millennials spend the least amount of money on food that requires at-home preparation. However, as income rises, there is a small positive effect on per capita at-home prepared food expenditure. While each preceding, older generation spends more on at-home food preparation than the younger generations and there is a larger gap between the Baby Boomers and Generation X.

Income governs food budgets

Income plays an important role for millennial shoppers. As income rises, expenditure shares for vegetables, fruits, red meats, and sugar increase while shares for poultry decreases as incomes rise. Millennial households generally allocate the lowest amount of their at-home food budgets to red meat and poultry. On average, expenditure for red meats decreases with the younger generation.
This health-conscious and nutritionally-aware generation is extremely mindful of what food they consume and the analysis of at-home grocery expenditure is important. The food purchasing behavior of Millennials not only determines their own dietary quality but also of their offsprings and the future generations. Grocery store shopping behaviors, however, are not permanent and may shift with time and millennial shoppers may find themselves in a position to swap frozen foods to a home-cooked meal in the near future.

Many studies have been focused on looking at how the largest living generation impacts food choices and selections in the grocery aisles. While they are aiming for healthier, fresher foods, they are also looking for more convenience. Trend lines and analysis are important to help fix the right building blocks and retailers to develop strategies and policies addressing the food industry issues.

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