Customers are willing to pay more if they can get a wide assortment of high quality fresh food, was a statement made recently by the president of Loblaw Companies. Galen Weston stated “early indications from data across the board suggest that when we put the right proposition in front of the customer, price is not the biggest determinant of what they choose to buy.”
He further commented that this trend seems to cut across all formats, from no-frills stores to higher end units that have a greater focus on specialty foods.
These are important insights given the company is currently navigating its way through a competitive time in the grocery industry, with American entrants like Target, Amazon and Walmart trying to lure away customers with lower prices and low-cost or free shipping.
Establishing fresh foods in convenience stores have been challenging because of slow customer adoption, high cost of food write-offs, and patience to stay committed to the category. As larger retail formats grow this category, customer adoption at convenience should improve provided quality and fresh products are regularly available.