CHICAGO — The grocery industry’s growth remains stifled as consumers increasingly shop across more retail channels and store formats, according to a new report from Information Resources, Inc. Volume sales in the grocery channel have been relatively flat since the recession, and dollar sales growth has been driven by decreased promotional activity and inflationary pricing trends. Dollar sales are projected to grow to $825.6 billion in 2018, marking a slow, steady climb from $751.9 billion in 2014.

Susan Viamari, vice-president of thought leadership for I.R.I.

“Retailers are grappling to not only understand consumers’ varied shopping patterns, but also capture shares of their increasingly fragmented shopping trips,” said Susan Viamari, vice-president of thought leadership for I.R.I. “Retailers really need a clear 360-degree view of shopper spending to grow.”

Grocery and big-box retailers are adapting to evolving shopping behaviors by experimenting with smaller-format stores, designed to deliver on the desire for quick and easy trips. The drug channel, ceding share to both higher-end and value formats, has reacted by expanding store count. These moves have led to more fragmentation in the marketplace, I.R.I. noted.

E-commerce is expected to climb into the double-digit range by 2022. 

Meanwhile, e-commerce, which represents less than 2% of overall consumer packaged goods sales, is expected to climb into the double-digit range by 2022. Despite its small overall dollars and share, the emergence of on-line grocery shopping has disrupted traditional sales models and prompted marketers to reevaluate everything from store location and format to assortment and delivery, I.R.I. said.

“To profitably serve the evolving needs of omnichannel shoppers, retailers must invest to understand the size of e-commerce across all categories, so they are prepared to balance inventory across the two realms, minimizing out-of-stock situations without carrying excess stock and allowing unnecessary costs to eat away at already razor-thin margin,” the report noted.

Big-box retailers are adapting to evolving shopping behaviors with smaller-format stores, such as Wal-Mart's Neighborhood Market.

To win in an omnichannel world and capture increased share of 360-degree spending, successful retailers will follow four steps: reward current customers, grow current customers, activate new shoppers and reactivate lapsed customers, I.R.I. said. Attracting new customers is expensive, so retailers should prioritize maximizing loyalty with current customers. This requires a shift from a traditional category management perspective to a customer management perspective, I.R.I. said. Fostering personalization through targeted programs is key.