The Phenomenon of Channel Surfing
A Letter from the President and CEO
Leslie G. Sarasin
With the rapid spread of locations in which food is sold, consumers have greatly expanded their shopping repertoire.
Back in the day when there were only three television channels, it was relatively easy to have a favorite one. It was a choice shaped by your preferences regarding the programs they offered, the convenience of the times those programs aired, the quality of the reception offered by that station and your reaction to the personalities of their national and local affiliate front men–and back then they were almost all men. For instance, if your taste in westerns ran toward Bonanza; if Red Skelton, Jack Benny and Candid Camera made you smile while Alfred Hitchcock made you shudder and Walt Disney made you feel good, and if you preferred getting your news in tandem with Huntley and Brinkley, you were definitely an NBCer.
Enter cable TV. Suddenly the landscape broadened from three channels to 300 and continued exploding to 3,000 possibilities –giving birth to the phenomenon of channel surfing. The executives at ABC, NBC and CBS were forced to face a new day, with competitors running the gamut of the alphabet – HBO, TBS, MTV and CNN, just to name a few. The idea of a favorite station changed to being category-specific with viewers choosing their news in one place, sports in another, sitcoms here and weather there. Surfing became the norm.
I'll bet you know where I'm heading with this.
Recent publications ranking the favorite supermarkets among consumers have given rise to a bevy of secondary articles about people "firing" their grocery store. Unfortunately, these articles are missing the point of what is really going on. People seldom fire a grocery store, but they do diversify where they shop. In other words, the food retail industry is experiencing the same channel surfing growth pains that the television industry did. With the rapid spread of locations in which food is sold, consumers have greatly expanded their shopping repertoire. Consumers are not firing their primary store as much as they are becoming more selective about what they buy and where they buy it. Just as people are reluctant to keep their televisions locked in on a single channel, consumers are becoming increasingly reluctant to choose any one store to fill all of their needs. Instead, driven by cost, quality, variety of selection and convenience, they are becoming category-specific about what they choose to buy across multiple channels.
For years, FMI's trends research has been tracking where consumers shop and why. In 2005, supermarkets captured 67 percent of the channel share, and then hit a low of 51 percent in 2013. Supercenters rose from 22 percent in 2005 to 29 percent in 2013. Other channels–warehouse, discount, limited assortment, organic and specialty–bounced up and down with single-digit numbers, all varying a few centile points any given year.
This year, in FMI's U.S. Grocery Shopper Trends 2014, conducted in collaboration with The Hartman Group, we have supermarkets back at a 54 percent level of market share, supercenters down to 22 percent and each of the other categories registering 1 percent lower from their positions the year before. What is most interesting is the leap in the number of people who claim they have no primary store. When FMI first started listing this option in 2011, only 2 percent said they had no primary store. In 2014, 9 percent could claim no primary store. Channel surfing in the food retail domain has grown such that nearly one out every 10 shoppers cannot name a primary store.
In the food retail world there has been a trusted and widely accepted vocabulary that included such words as primary store, store loyalty, stock-up trip and fill-in function. Just as the phenomenon of channel surfing has been a challenge to the world of television, a similar phenomenon is now challenging the world of food retail–forcing us to rethink the meanings of some of our most accepted terminology.
Interested in learning more? Join me at FMI Connect–the Global Food Retail Experience in Chicago, June 10-13, where we will be talking more about channel surfing and other relevant consumer trends in the presentation entitled "The World is Not a Stage, It's a Shopper Market." I hope to see you there.