Grocers sit in the middle of a snacking shift

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Dive Brief:

• Grocers nabbed sales of nearly 160 million bags of chips, boxes of crackers and other snacks from competitors during the 52-week period ended March 22, according to a recent snacking report from NielsenIQ.
• However, grocers lost around 56 million snack unit sales to club and mass merchandisers over that same period, the firm found.
• The report indicates grocers sit in the middle of a snacking shift as price-conscious consumers cut back on snack spending and increasingly prioritize larger pack sizes and private label options.

Dive Insight:

NielsenIQ’s research shows that shoppers are turning to a variety of measures to spend less on snacks. That’s both good and bad news for grocers.

The good news is that grocers are siphoning away a significant number of snacking dollars from retailers that specialize in impulse purchases and single-serve snacks. This includes c-stores, which accounted for 38% of the unit shift to grocery in the year-over-year period ended March 22, followed by drug stores (29%) and dollar stores (22%).

Forty-two percent of shoppers told NielsenIQ they’re buying snacks less often, and 63% said they’re buying larger sizes to save money over the long run. This bodes well for grocers, which specialize in multipacks, family-size bags and similar options.   

But that drive to save by buying in bulk also cuts against grocers, as 90% of the snacking unit sales that grocers lost during the period NielsenIQ measured went to club stores like Costco and Sam’s Club. In all, grocers lost $247 million in snack sales to club retailers and mass merchandisers, NielsenIQ found

It also appears that consumers are spending less on snacks overall. The highest-spending group — those who say they spend more than a quarter of their monthly food budget on snacks — has shrunk compared to 2023, while the percentage that says they spend up to 10% of their monthly budget on snacks has increased.   

Retailers that sell private label snacks are positioned to win in this evolving snacking battle, the report indicates. Eighty percent of consumers surveyed by NielsenIQ said private label snacks offer equal or better quality compared to name brand snacks, with Gen Z displaying a particularly positive outlook compared to other generations. 

E-commerce is also proving to be an increasingly popular channel for snack shoppers, with 294 snack unit sales shifting from brick-and-mortar stores to online during the period.

Another positive finding for grocers: They’re still the place where consumers purchase snacks most often, followed by mass merchandisers and dollar stores, according to NielsenIQ.