What’s next for local markets?

Roberta Alpert, of Somers, scans produce at the new Stop & Shop, formerly an A&P, in Mount Kisco. Photo by Tania Savayan/lohud

Charting a supermarket future in a dizzying present

It used to be you knew who your competition was.

“We have gone from 20th century wars where Gimbel’s fought with Macy’s and Coke fought with Pepsi to what is a 21st-century bar fight where everybody’s fighting with everybody else,” says supermarket expert Paco Underhill.

Nowhere is the competition fiercer than it is over the spending habits of millennials, and supermarkets are paying attention, and are prepared to make some changes.

Whole Foods, the store famous for fresh food and sticker shock, recognized that it was pricing itself out of a key segment of shoppers. In May, the chain announced it will create “new hip-cool technology oriented” stores geared to 18- to 34-year-olds.

In June, the chain said the stores would be called “365 by Whole Foods Market” and would open first in California, Washington, Texas, Oregon and Ohio.

This month, DeCicco & Sons opens a Larchmont store that puts a premium on being green, with LEED certification and extensive design efforts to reduce its carbon footprint. It’s the most expensive store the regional chain has ever built, says John DeCicco Jr., the wunderkind behind the effort.

DeCicco’s is betting the green philosophy will pay off with younger shoppers who’ll respond to DeCicco’s efforts and reward it with their loyalty.

For supermarkets, the stakes of winning younger customers are incredibly high. Win big and you set up shopping habits that could last 70 years. “Once we reach age 35, almost 80 percent of our weekly purchases are routine,” Underhill says. “If I look at your shopping list, you’ve decided long ago the kind of mustard, the kind of seltzer, the kind of Cheerios you like.”

That brand loyalty begins early, when you see what products your family uses. When you get your first apartment and you’re setting up housekeeping, you tend to seek the familiar.

“We have a generation of millennials who are going back to mom and asking, ‘What was the dishwasher soap that you used?’” Underhill says. “It goes back to how we were programmed, those sensory impulses from our youth.”

Millennials are tied to their tech, and technology is driving much of the change.

Stew Leonard Jr., president and CEO of the Stew Leonard’s supermarket chain, sees technology as a key tool.

“The suggestion box has gone from a pen on the end of a chain to smartphones, Facebook and Twitter,” he says. “We have almost 50,000 Facebook fans.”

While printed fliers might now account for 80 percent of Stew’s customer outreach, compared to 20 percent on smartphones, Leonard says he sees those numbers flip-flopping as millennials enter prime parenting years and demand a more digital presence.

“We have a generation of millennials who are going back to mom and asking, ‘What was the dishwasher soap that you used?’” — supermarket expert Paco Underhill

A shopper at DeCicco’s Family Market in New City checks her phone. Photo by
John Meore/lohud

“We’ve got to make our website great, because we know that’s where they’ll go before they come out to the store.”

Leonard has seen it at home. When he invites his 20-something daughters out to dinner, “they’ll get on their phones and check out the menu before I’ve even made the reservation.”

That connection is instant, vital, expected, and not going away, he said. And his stores have to be nimble to keep that customer happy.

Underhill has been talking to industry leaders about technology changing the supermarket game in other ways.

“If your grocery list is set, why should you keep having to go back to the store to buy the same stuff?” he wonders. “Before too long, a smart kitchen could recognize what your pantry is low on and send you a text message to ask if you want those items ordered. It isn’t that far off.

“If I’m a supermarket in Yonkers, how long will it be before I don’t have baggers but have a staff of people with iPads filling out grocery lists to be picked up at an appointed time?”

The grocery store won’t disappear, he says, but the way we use it is going through an evolution.

Supermarket consultant Michael Powell agrees.

“Things will keep changing, not rapidly, not overnight,” Powell says. “The grocery store has been around for quite a while and there’s still a lot of space, a lot of flexibility to adapt to where the culture is going.”

The author

In more than 75 interviews over the past two months, Peter D. Kramer has learned a bit about supermarkets: how they’re designed and, most important, the key role they play in their customers’ lives. His own supermarket journey has been peripatetic, taking him from Waldbaum’s in Tappan to New Hampshire to New Mexico and now to New Jersey, where the father of four has learned to bring his own bags and scan his own groceries.

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