Canadian grocers are sensitive to certain changing demographics.
As the Canadian population has grown more diverse over the last few decades, grocery stores have gone out of their way to add to their lineup of ethnic foods, carving new aisles into their precious real estate to serve this lucrative market.
Catering to an increasingly diverse market is smart business planning, yet grocers and consumer packaged goods companies arguably haven’t made the same effort in response to an even larger demographic shift that is already well underway: the aging population led by boomers. For all the talk about courting younger consumers, research shows boomers are a high value segment that’s being somewhat ignored.
One in three adult Canadians is already over the age of 55 and that ratio will continue to rise as more boomers inch closer to retirement. Within the next 20 years, boomers will account for almost half of all Canadian households. But the rapid growth of boomers isn’t even their most alluring feature—it’s their spending power. Between 2000 and 2016, the population aged 55 and over saw its share of the total income of all Canadians jump from 24% to 36%. This trend will continue to increase as the older population grows. In addition, the average net wealth of the population aged 55 and up is now close to $1 million, which is well above the net worth of the younger population.
Engaging this cohort can be a challenge. Just as it is wrong to assume all millennials are alike, it’s a mistake to stereotype and overgeneralize about boomers; this is a diverse group with particular tastes that change depending on where they live.
To illustrate how diverse this cohort is, consider the differences between two segments we’ll call empty nesters and heartland retirees. Empty nesters are suburban, upper-middle income households consisting of married couples over age 55 whose children have flown the coop. Most often you’ll find them wandering the aisles of Safeway, Sobeys and Real Canadian Superstore. They respond to positive messages about taking control of one’s long-term health.
Heartland retirees, on the other hand, are middle-income retirees mostly found in rural areas in unpretentious detached houses and mobile homes. When stocking their fridges and pantries, they tend to favour banners like Foodland and Freshmart. The most effective way to engage these particular boomers would be to appeal to their sense of adventure and love of all things outdoors.
Given the diversity within the boomer generation, it’s important to consider the type of boomer that is most relevant to each store, since it will shape everything from the message you use to engage them to the foods and brands you want to promote. For instance, with a strong commitment to living a healthy lifestyle, empty nesters are more likely to stock up on national branded products. Emphasizing the healthy qualities of these and other products could go a long way to help drive sales. The more rugged heartland retirees, meanwhile, are more value conscious than brand driven and typically gravitate to private-label products.
But perhaps the best way to serve the aging population is to focus less on what they put in their carts and concentrate on how they shop. Generally boomers, regardless of the segment they belong to, want a hassle-free shopping experience with products easier to reach, labels that are easier to read and packages that are easier to open. Grocers may also want to consider other incentives to appeal directly to boomers, such as promoting seniors’ days and offering special discounts to those over age 55.
If your store happens to be near a high concentration of empty nesters, try tweaking flyers and in-store displays to highlight health products. As for grocers serving heartland retirees, their love of the great outdoors also suggests they’re less into crowds so gearing in-store promotions around off-hours may be the trick to winning more of their business.
When grocers noticed the face of Canada was changing, they responded by adding more ethnic foods to their shelves. It’s time they respond to the aging demographic the same way.
Joshua Levi is a vice-president at Environics Analytics who focuses on the grocery sector and consumer packaged goods.
This article appeared in Canadian Grocer’s February 2019 issue.