There is a growing “trade-off consumer” group representing 34.5% of the U.S. population that spends less on groceries compared to others, according to Rick Miller from Big Chalk, who spoke at the Grocery NEXT event in Chicago last week.
Miller said that this consumer group buys less food overall and shops at multiple grocery stores. And when they do shop, they are more likely to purchase sale items.
Retailers benefiting from these consumers include Walmart, Aldi, and Dollar Tree. On the other hand, Costco, Sam’s Club, Amazon, and mainstream grocery chains are falling behind. Miller pointed out that the trade-off consumer’s limited discretionary budget doesn’t support bulk purchases, even though they may offer a better value over time. In addition, these shoppers don’t see a value in paying for Amazon’s delivery service.
“Trade-off consumers have been told Walmart has the lowest prices,” Miller said. “It’s a messaging thing. These consumers don’t necessarily think, ‘Oh, I’m getting the best value if I go into an Albertsons or Kroger.'”
Trade-off consumers also aren’t reachable through Facebook or X. Instead, they spend time on Instagram, Snapchat, TikTok, and Pinterest.
