Key takeaways

• Consumers seek simplicity when it comes to food purchases: 52% of respondents say they value convenience now more than they did in the past. Similarly, grocers recognize the value of easier options, as more than 8 in 10 (84%) agree successfully competing on convenience is key to increasing unit sales volume.

• Grocers surveyed are concerned about competition for convenience-seeking consumers from internet grocery stores (56%) and third-party shopping apps (53%). But consumer survey data and industry trends suggest grocers should be more worried about other traditional grocers, restaurants, and dollar stores.

• Over half (53%) of consumers surveyed say that figuring out "what's for dinner" is one of their major pain points, and 44% would regularly buy from a grocery store that could help them with meal planning.

• Eighty percent of grocers surveyed are optimistic about Generative AI's (GenAI) potential financial contribution. They list its use as a consumer assistant as their top choice for first highly successful use case or "killer app."

Why this matters
Grocery retailers are working to navigate a new wave of change that is challenging their conventional business models. Stressorsinclude emerging forms of competition, rising shopper expectations, and tightening consumer wallets. Despite this, traditional grocery strengths like fresh food and convenience play an increasingly important role in many consumers' purchase decisions. In its sixth annual assessment of the state of fresh food, "A Fresh (Food) Take on Grocery Convenience," Deloitte examines how grocers might win a greater share-of-stomach by bringing "fresh convenience" to consumers as they plan their meals, choose where to shop, and select their food.

Consumers stock up on fresh, convenient options
Fresh food and convenience are typically at the top of consumers' grocery lists. The desire for easy options appears to be shaping how shoppers decide what to grab off the grocery store shelves.

• Grocers are recognizing the importance of fresh food, as more than half (52%) of grocery executives expect fresh to be their most strategically important department over the next one to three years. The produce, deli and meat departments lead this charge.

• Nine in 10 U.S. consumers say fresh food makes them happy, and two-thirds (66%) would pay a premium for fresh food. On average, shoppers say they would pay 22% more for fresh over the alternatives, such as canned, frozen, or other options.

• When it comes to deciding between either fresh or convenient food, ease often wins. Eighty-two percent of shoppers say convenience drives their fresh food decisions. In addition, two-thirds (67%) of consumers say that on busy days, they buy more convenient food items, even if they are not healthy (or fresh).

• Half (52%) of consumers say they value convenience now more than they did in the past; this sentiment is more prevalent among millennials (57%) and Gen Z (61%), indicating a lasting trend.

• Grocers understand the value of convenience as 85% say they are making significant investments to increase it.

Key quote
"Grocers are navigating a new wave of change, including price sensitive consumers, food away from home eating into 'share of stomach,' and stress on the profitability of the grocery business model from grocery delivery last-mile logistics. Yet, there continues to be great opportunity around grocers' strength with fresh food. Shoppers love fresh food and crave convenience, finding new ways to provide consumers with 'fresh convenience,' by offering fresh choices in approachable ways could help drive more sales."

          — Daniel Edsall, grocer leader, and principal, Deloitte Consulting LLP

Grocers should cultivate convenience to compete
Consumers seek convenience not just in their food selections, but also in how and where they shop. As consumer preferences oscillate between easy offerings and fresh food, there is growing competition among less-traditional shopping formats. To stay ahead, grocers should adopt strategies that balance consumer demands, both in the products they stock and the overall shopping experience.

• In the battle to be seen as the easy choice, grocers expressed concern about competition from internet grocery stores (56%) and third-party shopping apps (53%). However, in the quest for convenience, consumers surveyed say they are more likely to continue frequenting their local grocer (47%), or otherwise turn to a restaurant (25%). Grocers also face competition from dollar stores selling fresh food, which the survey data indicates may be under appreciated by grocers as a competitor.

• The biggest opportunity for enhancing customer-perceived convenience in-store is at the point of sale. Consumers' top priority for in-store convenience is speedier checkouts (73%), followed by more convenient store layouts (59%) and easier returns (51%).

An enduring problem: "what's for dinner?"
For grocers seeking a chance to create convenience beyond the middle aisles, a strong opportunity lies at the very start of the process: as consumers build their meal plans and make their shopping lists. GenAI may present a solution to help grocers capitalize on the meal planning moment.

• Over half (53%) of U.S. consumers surveyed say that figuring out "what's for dinner" is one of their major pain points.

• Younger consumers including Gen Z (66%) and millennials (60%) are especially likely to call figuring out dinner a primary pain point. Similarly, households with children (62%) also struggle to plan evening meals.

• Fifty-eight percent of Gen Z and 55% of millennials say they would regularly buy from a grocery store that could help them with meal planning, and 44% of shoppers overall agree.

• Helping consumers plan could be a job for GenAI, which grocers are significantly more optimistic about. When asked about GenAI's potential to make a significant financial contribution, 80% of surveyed executives say they are optimistic, compared to just 40% in 2023. Working as a consumer assistant for meal planning and other services was grocery executives' number one choice for the first "killer application" of GenAI technology.

• Two-thirds (65%) of executives say their companies are increasing investments in the technology, and 73% say their companies will have a major application in place within the next six months.

Key quote
"Despite their growing desire for quick and easy choices, consumers still show significant preference for their neighborhood grocery stores. Grocers can capitalize on, and look to enhance, that loyalty through innovative solutions that pair fresh food with more convenience. Investing in the pivotal moments throughout the shopping process can help ripen grocers' chances for creating an industry advantage that shoppers will remember long after their carts are full."

          — Adam Almond, principal, Retail and Consumer Products, Deloitte Consulting LLP

"A Fresh (Food) Take on Grocery Convenience" is based on a survey of 100 U.S.-based grocery retail executives from organizations with at least $1 billion in annual revenue, and 2,000 U.S. consumers, leveraging an approach designed to approximate U.S. census demographics. The surveys were conducted in May and June of 2024.

Connect with us on X at @DeloitteUS or on LinkedIn @DannyEdsall or @AdamAlmond.