Local shopping hasn’t diminished since COVID-19 prompted more consumers to seek out shopping options closer to home, per the report. But consumers can be particular about what kinds of retailers they view as local and which types of local brands they seek out, according to new research from PDG Insights.
While the meaning of “local” can vary, PDG Insights defined the term as within 15 miles of the survey respondent’s home. Roughly nine out of 10 people agreed with that definition, per the findings.
Just because a business is located within that distance, though, doesn’t guarantee that shoppers will consider it to be a local one. PDG found that local companies that are only online don’t get the same recognition from consumers as ones with brick-and-mortar locations, which could potentially pose a problem for e-grocers. National chains and locally owned franchises also don’t match local sentiments either, per the research.
The research is based on two surveys PDG conducted in March. One of the surveys collected responses from over 300 people about their perception of local shopping and which retailers they shop locally, while the other polled more than 500 people about their local brand purchases.
Diana Sheehan, principal and CEO of PDG Insights, noted that consumers are less likely to view a retailer as locally owned the larger the merchant gets.
“While still more likely to be viewed as locally owned than a national chain, as a company grows to include a state-wide or national presence, fewer consumers agree they are locally owned,” Sheehan wrote in a blog post about the research.
Among 10 top sectors, grocers ranked second, at 86%, behind restaurants (94%) as surveyed consumers’ most important locally owned places to support.
While reasons for shopping locally can vary from consumer to consumer, PDG Insights noted that main themes revolve around people wanting to support their communities, to find unique or hard-to-find products, and to shop close to home for convenience or to lower their carbon footprint.
On the brand side, nearly half of the shoppers PDG surveyed said they go out of their way to buy local brands or products. And while consumers bought local brands across all 18 grocery and consumable categories studied, the research found that penetration varied by category.
“You’re seeing perimeter categories being a key piece,” Sheehan said in an interview.
Fifty-two percent of surveyed consumers said they intentionally bought local fruits and vegetables last month, while 50% and 46%, respectively, said the same for local dairy and bakery items. Pet care, deli and floral fared less well on penetration, but PDG Insights noted that could be due to a number of factors, like fewer local brands in those categories or availability.
While some categories, like dairy and produce, see consistent interest regardless of shopper age, others are influenced by consumer demographics.
“Parents tend to actually care a lot more, particularly young parents with babies” about local, Sheehan said.
Local preference also varies by age differences, the research found. For example, shoppers ages 18-34 said beverages, cookies, snacks, candy and breakfast items were their top categories, while shoppers ages 35-54 ranked fruits, vegetables, dairy, eggs and cheese as their top choices — similar to the preferences of shoppers ages 55 and older.
“Consumers under 35 are intentionally buying local brands in twice as many categories as those 55 and older,” Sheehan noted in a blog post. “Shoppers under 35 over-index in buying local in 8 different categories … For retailers, this reinforces that featuring and promoting local brands is very important, regardless of category.”
One of the key nuances is that local can be very or extremely important in categories that are not usually considered to be major categories, Sheehan said.
“Baby is not a top thing, but when people prioritize shopping baby, it’s actually incredibly important to them,” Sheehan noted in the interview.
Defining what is a “local brand” can vary among consumers, with 28% of shoppers saying it is produced within their immediate city or town, 20% saying production must be within 50 miles and 22% saying it must be made in-state, per the research. For perimeter categories, “local” tends to become more geographically focused, with at least half of consumers saying it must be produced within 50 miles.
As with local retailers, consumers support local brands because they want to bolster the local economy and find different items.
“People are shopping local brands for the same reason that they are shopping local retailers,” Sheehan said. “It’s really this idea of ‘I’m wanting to support my community. I’m wanting to be able to find things that are unique, but I can’t find other places.’”
Sheehan also noted that retailers and brands have opportunities to better communicate product origin with in-store signage in categories where customers want local products.
“More than half (54%) of consumers say they choose retailers to shop based on if they carry local brands that matter to them,” Sheehan wrote in a blog post. “This is a critical way for small independent retailers to differentiate themselves from national chains.”
This article was written by Catherine Douglas Moran from Grocery Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to firstname.lastname@example.org.