This month’s Times&Trends focuses on Wal-Mart’s highly successful supercenter. The soft economy has encouraged a significant shift of CPG shopping from the traditional supermarket over to deep-discount supercenters, primarily Wal-Mart. Their rapid expansion and replacement of many traditional mass merchandiser formats as a major shopping destination is having a significant impact on the changing CPG consumption landscape. This brief will highlight some of the global facts about consumption at Wal-Mart supercenters and some of the demographic strengths of its base of shoppers.

This free summary is also accessible via the GMA Web site  at http://www.gmabrands.com/publications/gmairi.cfm

At 60% household penetration, Wal-Mart supercenters grab 10 percent of shopper spending. Shopper spending is twice the size of their traditional mass format and of the entire drug channel, but one-fourth the size of the entire grocery supermarket channel. Larger households are driving the impact – bigger cart totals, more frequent trips.

Kids or no kids, shoppers are finding their way to Wal-Mart’s supercenters. Wal-Mart supercenters index higher on shopper trips among households with kids. They also spend considerably more per trip than households without kids. Supercenters do well also with the more dominant demographic group, households without kids, indexing 96 on trips and netting a much higher average cart ring of $50 compared to the average for the supermarket channel’s $32 and the drug channel’s $22.

Grocery supermarkets and other channels contribute 60 percent of Wal-Mart supercenters’ two-year growth. Many shoppers are transitioning from traditional Wal-Mart mass outlets to newer supercenters – 15% came from their older format. Other factors include the closing of many K-Mart mass stores, the impact of the soft economy and job pressures, stimulating migration to supercenters like Wal-Mart, and increased stocking of shelf-stable items at discounted prices. Finally, 25 percent of Wal-Mart’s supercenter growth came from increased spending from their supercenter shoppers.

Expanding supercenter distribution enables Wal-Mart to grab share of faster growing dinner solution consumption. Transitioning from shelf-stable food & beverage to a full complement of frozen and refrigerated shopper options, 25 percent of Wal-Mart supercenters’ shopper spending is against the most challenged meal occasion of the day, the dinner meal. Frozen dinners & entrees are the fifth most purchased food & beverage category by supercenter shoppers at Wal-Mart; frozen poultry number nine.

Supercenter shoppers’ non-food spending pattern is similar to their traditional mass merchandiser store format. Most of the difference in shopper consumption is going to be seen on the grocery side. Supermarkets on average have a much heavier emphasis on house-care categories than either Wal-Mart format – more paper goods, plastic bags and containers. But general merchandise is much stronger at Wal-Mart supercenters. These categories tend to take up much more space than most supermarket chains are willing to give to them.

Wal-Mart’s private label shares are on a flat to soft course. Wal-Mart announced this year they would be lowering prices on many of their store brands in view of the soft economy. Reflecting this, unit shares are doing better than dollar shares. But there is a very consistent flat to soft private label share pattern across all food & beverage and non-food consumption areas. Shoppers are becoming experienced multi-channel consumers, more savvy about values and know when they see a good price on a national brand. They are finding very attractive “everyday lower prices” at Wal-Mart supercenters.

The hype over Wal-Mart “forcing” shoppers to buy more of their own store brands so far has not played out. The latest year of data shows private label to command a 20.3 percent share of food & beverage and 12.4 percent of non-food supercenter consumption, each down from the prior two calendar years of activity.