Retailers, Consumers Disagree on Fresh Food Purchase Drivers: Survey

New research from Deloitte on consumer and retailer attitudes around fresh foods finds large discrepancies between what consumers say is important to them and what retailers think is important to their customers.

While 94 percent of retailers said organic was an important factor in the purchasing decisions of their typical customer, only 47 percent of consumers agreed that organic was important when it comes to buying fresh foods.

Not surprisingly, consumers cited price as the leading purchase driver for fresh foods, at 93 percent, followed by personal health and wellness (86 percent) and convenience (84 percent). All these factors have remained important through the last several years. Other purchase drivers, however, have declined from pre-pandemic levels. These include locally grown or sourced (down 20 percentage points from 2019), environmental sustainability (down 15 percentage points), and non-GMO (down 14 percentage points).

The research found that retailers may also be assigning undue importance to those other factors. Ninety-three percent of retailers said locally grown or sourced was an important purchase factor, compared with 60 percent of consumers, for example. Similar disparities were seen between retailer perceptions and consumer responses around environmental sustainability and non-GMO.

“That said, these purchase drivers may still play a role in helping grocers differentiate themselves from the competition,” the report noted, however.

Although consumers might not consider them to be the final deciding factors in making a given purchase, about 80 percent of consumers surveyed said they prefer food retailers that source food from local farms, and 57 percent said they prefer to shop at a store that is meaningfully reducing food waste.

Interestingly, retailers underestimated how much of a premium consumers said they would pay for sustainably sourced fresh foods. Half of all consumers said they would pay a higher price for such items, with an average premium of 30 percent, while retailers estimated that only about 20 percent of consumers would pay more, with an average estimated premium of 12 percent.

Both consumers and retailers said food prices overall were higher than they needed to be to cover the increased costs of producers. Eighty percent of consumers said increased prices have had more to do with padding company profits than offsetting increased supply costs (up seven percent from a year ago), and 85 percent of retailers said “several” or “most” of their suppliers were raising prices more than needed in order to drive higher profits.

Among other findings from the report:

• Eight in 10 consumers said they look for foods with nutrition profiles personalized to their needs, up three percentage points year-over-year and 18 percentage points higher than in 2021.

• Sixty-four percent of consumers said they believe fresh food can act like medicine, while retailers estimated that only about 40 percent of consumers believe that.

• Forty-six percent of consumers said they would use an app from their grocer to help make healthier food choices, and about 80 percent of retailers said they are investing in digital functionality that would help consumers do so.

• Consumers have a relatively high degree of trust in their grocers, according to Deloitte’s TrustID methodology, which gave grocers a net score of 40. That compares with a score of 32 for apparel retailers, 30 for mass merchants 28 for department stores, and 27 for convenience stores. Grocers scored highly for their humanity, capability, and reliability, but received low marks for their transparency.

“Grocers that want to improve trust might gain traction by helping consumers get comfortable with how their data is used, providing them with easier-to-digest information about environmental, social, and governance impact, and being more upfront about how retail media and other revenue sources come into play,” the report concluded.

Deloitte surveyed 100 U.S.-based grocery retail executives from organizations with more than 10,000 employees in June and July, and additionally surveyed 2,000 U.S. consumers in July through an approach designed to approximate U.S. census demographics.

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