Amazon, H-E-B, Costco, Sam’s Club and Walmart are Best Positioned for the Future, dunnhumby finds

• Personal finances will remain the biggest stressor for U.S. consumers and Fiscal Conservatism will be the most important trend for the next 30 years
• Retailers need to ensure today they are winning the loyalty and engagement of Generation Y and Generation Z shoppers

CHICAGO, Illinois – June 21, 2023 – dunnhumby, the global leader in customer data science, today released a special report examining what trends will have the biggest potential impact on grocery retailers over the next three decades, which retailers are best positioned, and which retailers need to evolve in order to meet the future trends. “Grocery 2053: A Data-Driven Gaze into The Future” found that Amazon, H-E-B, Costco, Sam’s Club and Walmart are best positioned for 2053 when the U.S. grocery retail industry will be worth $1.9 trillion, more than double its size today.

In this special report, dunnhumby included the largest 35 U.S. retailers across conventional, mass, club, specialty, discounter, drug, and dollar channels. dunnhumby identified 15 sub-trends affecting the grocery industry and then grouped these into mega or macro trends that will have the biggest impact. The dunnhumby Retailer Preference Index database — that contains over 70,000 consumer survey responses conducted from 2017 – 2022 — was analyzed to understand which trends matter the most to consumers. Retailers were then evaluated for 2053 based on their future expected customer base, the trends relevant to them, and the value proposition alignment required.

“While the shifts the retail grocery industry have gone through over the last three and a half years have been quite dramatic, the reality is that consequential shifts unfold over decades. It isn’t one five-year period in grocery history that will change the fortunes of retailers. Rather, grocers will rise or fall based on their ability to align themselves to the dominant demographic, cultural, economic, and technological trends that will slowly reshape the market context over decades to come,” said Matt O’Grady, President of the Americas for dunnhumby. “The aim of our report is to help retailers understand what shopper values that will shape the decades to come, and offer a framework of how to transform their organizations over time.”

Key findings from the study:

• Generation Y (born 1981-1996) and Generation Z (born 1997-2012), who came of age during the Great Recession of 2008-2010, began their work lives, started their families, and may have become caregivers before and during the pandemic, will be central to how the market evolves over the next three decades. More than any other age groups, Generation Y and Z have been scarred by both the Great Recession and the Pandemic and how those two periods framed their views on their personal finances.
• Fiscal Conservatism (concern about the economy as well as personal day-to-day and long-term finances) is the biggest source of stress for consumers and the most important over-arching trend that will continue to affect consumers over the next 30 years. Only when income exceeds $150,000 per year do finances even out with health and the environment as sources of stress for consumers. And the younger the consumers, the more they tend to be stressed with finances, both long-term and day-to-day.
• The 10 retailers best positioned to benefit from Fiscal Conservatism over the next 30 years are Lidl (1), Food 4 Less (2), Aldi (3), Costco (4), Fry’s (5), Amazon (6), BJ’s Wholesale (7), H-E-B (8), Shoprite (9), and WinCo (10). Conversely, Harris Teeter, Wegman’s, Publix, and Sprouts Farmers Market share is vulnerable to the fiscal conservatism trend over the next 30 years.
• Health and Wellness (2), Data 3.0 (3), Values-Based Consumption (4), and Channel Proliferation, (5) follow Fiscal Conservatism as the second through fifth most important trends of the future. CVS topped all retailers for Health and Wellness followed by Amazon, H-E-B, Rite Aid, Walgreens, Costco, Walmart, Fry’s, Kroger, and Meijer. Amazon was the top store for Data 3.0, Values-Based Consumption, and Channel Proliferation.
• Health and Wellness and finances are opposing forces for many consumers. The struggle between buying healthy and affordability is real. While 80% of consumers aspire to choose healthier foods when shopping, price is a barrier for 60% of them. Consumers with higher incomes are more likely to regularly choose healthy foods when shopping. Younger customers care more about their mental health, whereas older customers care about their physical health.
• Data 3.0 (defined in the report as the adoption of new technology) is still nominal, but it greatly appeals to younger generations. That means that winning the hearts and wallets of future post millennial generations will happen not only via offering self-checkout lanes (used by four out of every five customers) but integrating new and holistic virtual tech into purchases and communications.
• Values-Based Consumption, based on values such as sustainability or on the welfare of store employees, remains aspirational and ranks last when customers are asked to trade off with other needs like finances and personal health. That’s because like Health and Wellness, consumer needs that are less personal and less immediate to the consumer take a back seat until the priorities are fulfilled (like one’s finances).

“Grocery 2053: A Data-Driven Gaze into The Future” is available for download today.

About dunnhumby

dunnhumby is the global leader in Customer Data Science, empowering businesses everywhere to compete and thrive in the modern data-driven economy. We always put the Customer First.

Our mission: to enable businesses to grow and reimagine themselves by becoming advocates and champions for their Customers. With deep heritage and expertise in retail – one of the world’s most competitive markets, with a deluge of multi-dimensional data – dunnhumby today enables businesses all over the world, across industries, to be Customer First.

The dunnhumby Customer Data Science Platform is our unique mix of technology, software and consulting, enabling businesses to increase revenue and profits by delivering exceptional experiences for their Customers – in-store, offline and online. dunnhumby employs over 2,500 experts in offices throughout Europe, Asia, Africa, and the Americas working for transformative, iconic brands such as Tesco, Coca-Cola, Meijer, Procter & Gamble and Raley’s.