Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Gas versus groceries

11.03.2011
U of A professor says food retailers need to step up game in battle for consumer's buck

A University of Alberta researcher says grocery retailers need to take heed that a jump at the pumps will be a blow to their bottom line. Alberta School of Business professor Yu Ma notes that if stores want to survive, they'll have to change their tactics in the face of rising gas prices in order to attract shoppers "hungry" for better deals.

Ma and his colleagues say that when the price of gas rises, the monthly grocery bill is the prime target for cuts. The researchers noted that there are two sets of decisions made in the gas versus grub dilemma. The first choice deals with location, which Ma notes is based on choosing the frequency of shopping visits, and distance to the venue. The second is deciding what to buy and when—in other words, whether to forgo a favourite brand for a no-name substitute or middle-tier replacement item—or to search vigilantly for deals or promotions. Consumers may also elect to purchase at wholesale or warehouse stores thus, choosing to buy bulk products in order to save money.

Ma says that wise retailers, those who recognize the changes in their customers' spending trends, will give the people what they want. Industry inclinations towards opening warehouse clubs and supercentres are not something that companies can resist if they hope to survive.

"You have to start thinking about providing one-stop shopping for consumers; they want to go to one place and buy everything in the same store," said Ma. "You have to provide them with that convenience."

And while the gas-and-groceries concept has been around for some time, Ma notes that more retail grocers are using their own gas stations on site as a shopping incentive for customers. By offering discount fuel prices or savings incentives from in-store purchases, it is a value-added attraction for customers to frequent the stores, even if they may be a little further out of the way.

Gone also, he says, should be the idea of retailers putting only single items on sale. Consumers will less likely be attracted to a store for one item in the expensive gas environment. Savvy grocers will have to come up with novel incentives, such as offering a basket of goods at a reasonable price, as a viable means of attracting consumer, says Ma.

"If grocery retailers can offer a promotion or a pricing strategy that fits the customer's objectives, if they tailor their promotional message to consumers based on how they can save money, it would be much more effective than some blind (single item) promotion," he said.

Retailers are not the only ones who will feel the effect of shifting loyalties in the wake of the groceries versus gas struggle. Manufacturers also need to find a way to become more competitive without cannibalizing their own brands, says Ma. He cites the example of top-tier brands offering lower-cost, brand-name alternatives to lower priced no-name brands, introduced briefly during the recent economic downturn. Scaling back a product's price means that the quality is also scaled back, says Ma. But he warns that frugal consumers still want their money's worth from a product, especially when filling the family car with gas is drawing directly from the grocery budget.

"Manufacturers have to think of the best strategy to use ensure long-term prosperity, and not just for short-term gain," he said.

Ma's article recently appeared in the Journal of Marketing.

Jamie Hanlon | EurekAlert!
Further information:
http://www.ualberta.ca

Further reports about: Manufacturers consumer's buck grocery retailers save money

More articles from Business and Finance:

nachricht Blockchain Set to Transform the Financial Services Market
28.09.2016 | HHL Leipzig Graduate School of Management

nachricht Paper or plastic?
08.07.2016 | University of Toronto

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: First-Ever 3D Printed Excavator Project Advances Large-Scale Additive Manufacturing R&D

Heavy construction machinery is the focus of Oak Ridge National Laboratory’s latest advance in additive manufacturing research. With industry partners and university students, ORNL researchers are designing and producing the world’s first 3D printed excavator, a prototype that will leverage large-scale AM technologies and explore the feasibility of printing with metal alloys.

Increasing the size and speed of metal-based 3D printing techniques, using low-cost alloys like steel and aluminum, could create new industrial applications...

Im Focus: New welding process joins dissimilar sheets better

Friction stir welding is a still-young and thus often unfamiliar pressure welding process for joining flat components and semi-finished components made of light metals.
Scientists at the University of Stuttgart have now developed two new process variants that will considerably expand the areas of application for friction stir welding.
Technologie-Lizenz-Büro (TLB) GmbH supports the University of Stuttgart in patenting and marketing its innovations.

Friction stir welding is a still-young and thus often unfamiliar pressure welding process for joining flat components and semi-finished components made of...

Im Focus: First quantum photonic circuit with electrically driven light source

Optical quantum computers can revolutionize computer technology. A team of researchers led by scientists from Münster University and KIT now succeeded in putting a quantum optical experimental set-up onto a chip. In doing so, they have met one of the requirements for making it possible to use photonic circuits for optical quantum computers.

Optical quantum computers are what people are pinning their hopes on for tomorrow’s computer technology – whether for tap-proof data encryption, ultrafast...

Im Focus: OLED microdisplays in data glasses for improved human-machine interaction

The Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP has been developing various applications for OLED microdisplays based on organic semiconductors. By integrating the capabilities of an image sensor directly into the microdisplay, eye movements can be recorded by the smart glasses and utilized for guidance and control functions, as one example. The new design will be debuted at Augmented World Expo Europe (AWE) in Berlin at Booth B25, October 18th – 19th.

“Augmented-reality” and “wearables” have become terms we encounter almost daily. Both can make daily life a little simpler and provide valuable assistance for...

Im Focus: Artificial Intelligence Helps in the Discovery of New Materials

With the help of artificial intelligence, chemists from the University of Basel in Switzerland have computed the characteristics of about two million crystals made up of four chemical elements. The researchers were able to identify 90 previously unknown thermodynamically stable crystals that can be regarded as new materials. They report on their findings in the scientific journal Physical Review Letters.

Elpasolite is a glassy, transparent, shiny and soft mineral with a cubic crystal structure. First discovered in El Paso County (Colorado, USA), it can also be...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Paper – Panacea Green Infrastructure?

30.09.2016 | Event News

HLF: From an experiment to an establishment

29.09.2016 | Event News

European Health Forum Gastein 2016 kicks off today

28.09.2016 | Event News

 
Latest News

First-Ever 3D Printed Excavator Project Advances Large-Scale Additive Manufacturing R&D

30.09.2016 | Materials Sciences

New Technique for Finding Weakness in Earth’s Crust

30.09.2016 | Earth Sciences

Cells migrate collectively by intermittent bursts of activity

30.09.2016 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>