Examining Opportunities for Grocery Chains in Underserved Markets
Grocery stores, superstores, and dollar stores all have one thing in common: they offer food products. However, according to a recent white paper by Placer.ai titled “Unlocking Potential in Underserved Grocery Markets,” grocery stores go beyond just offering food products by providing consumers with a variety of fresh foods. The study also found that areas with a strong presence of dollar stores often lack access to traditional grocery options.
The East and West Coasts Lead the Way
The white paper analyzed data from ten states where residents were more likely to visit grocery chains between January 2024 and April 2024. These states included Oregon, Vermont, Washington State, Massachusetts, California,Maryland , New Hampshire , Connecticut , New Jersey ,and Rhode Island . Together these states accounted for over half of all food retail visits during this time period.
A Different Story In Other Regions
However,the story is different in the West North Central and South Central regions of the United States. For example,in North Dakota,grocery chain visits only accounted for 11.7%of overall food retail traffic during this time period.In Mississippi,Oklahoma,and Arkansas,grocery store visits made up less than20%of total food retail traffic.
Interest Is Not Lacking
Despite these lower numbers,the white paper points out that low visit shares do not necessarily mean there is no interest or demand from consumers.”In some underserved regions,current grocery chains are experiencing significant growth indicating an increasing demand for their offerings,”the report explains.For instance,North Dakota saw a9 .1 %year-over-year increasein grocery store visits,doublingthe national average growth rate.Other underserved markets such as Alabama also experienced higher-than-average year-over-year growth rates,suggesting untapped potentialfor grocers lookingto expand into new markets .
Accessibility Is Key
Accordingto thewhitepaper,the issue for grocery stores in underserved areas is not a lack of interest,but rather a lack of accessibility. This means that high-end grocers,like Trader Joe’s or Sprouts,may not be the best fit for these locations.Instead,the report suggests that mid-range grocery stores such as Aldi,Kroger,and Lidl may be more successful in meeting the demands and preferences of consumers.
A Good Opportunity For Expansion
The white paper also highlights how underserved markets can present an opportunity for expanding grocery chains and civic leaders who want to increase access to healthy food options.”Identifying underserved markets with untapped demand can be crucial in deciding where to focus efforts on developing new grocery options,”the report states.
In conclusion,underserved markets offer potential growth opportunitiesfor grocers lookingto expand their reachand provide communities with greater access to fresh food options. By understanding consumer demand and preferences,grocery chainscan successfully tap into these untappedmarketsand contribute towards promoting healthier lifestyles within local communities.
