CHANGING SHOPPING PATTERNS

CHANGING SHOPPING PATTERNS
PREPARED BY: IVA DRUZIC, LAUNCH!
MAY 2013
CHANGING SHOPPING PATTERNS
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How we shop
What shoppers want
Who shops
Where we shop
HOW WE SHOP
How we shop:
Shift in Household Size
• The condo population is a growing.
– Less need to pantry load, condo dwellers are looking for smaller product
sizes.
– Online shopping and local stores gaining traction as condo dwellers tend
not to own cars.
• Canadian household sizes are shrinking.
– 63% of Canada’s families are made up of 1-2 member households.
– In 1970 the average Canadian Family size was 3.7 people, in 2010 it was 2.9.
• In the 2011 census, for the first time, one-person households outnumbered couple
households with children under 24.
– Growing need for single-serve portions and prepared meal offers.
– Addition of more express lanes as smaller households tend to shop more
frequently and have smaller baskets.
How we shop:
Increase in Shopper Frequency
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Smaller households tend to shop more frequently.
– Decline in the average number of shopper trips annually (from in 200 in
2006 to 179 in 2012).
– Average Spend Per Trip:
• 1-2 member household: $36 (avg. per person: $18-$36)
• 3+ member household: $51 (avg. per person: $13-$17)
How we shop:
Shift in Economic Outlook
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Slow to regain confidence in spending based on economic outlook.
– 35% of Canadians believe the country is in recession down from 61% in 2012.
– 75% of Canadians indicated they would continue to be careful with their money
even if the economy improves.
– 80% of Canadians agreeing that they are always looking for ways to reduce
spending on everyday items.
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Continued interest in new products and innovation.
– 67% of Canadians say they are willing to pay more for a new product that is better
than what is currently available.
– 64% believe that New! really does mean improved for health products, 59% for
household care, 57% for personal care and 57% for food products.
How we shop:
Shopper Influencers
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Value vs. Name
– 60% of Canadians believe store brands are good value for the money.
– 50% will buy brand name products on sale.
– Trust in private label is strongest in the food and beverage category, more than
50% of Canadians regularly purchasing dry food, frozen vegetables and bottled
water.
– Health & Beauty products have stronger brand name loyalty, 30% of shoppers
stating that they would never purchase private label deodorant or makeup.
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Word of mouth and first hand usage opinions remain top points of trusted
influence.
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Traditional media still works, specifically flyers.
– 80% of Canadians reporting that flyers influence which items make it on their
shopping lists.
– 90% of Canadians read print flyers regularly or occasionally , 26% regularly read
digital grocery store flyers.
– Among those reading both print and digital formats, 71% still prefer the print flyer
format.
How we shop:
Decision Making at Shelf
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Needs vs. Value:
– 80% use hand written shopping lists however even with needs defined, 69% of
shoppers indicate that they will "walk all the aisles to be sure not to miss anything
I need”.
– 28% are "mission-shoppers" who only grab the items on their list and aim to be
finished as soon as possible.
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More than 50% of Canadians typically identify product types on their shopping
list and decide on the brand once in store.
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Rise of mobile as in-store trusted tool.
– 40% of smartphone owners use their device for on-site research
– 22% have searched for product reviews on the spot.
• Overall, 40% say they have made a different purchase decision because of
information accessed on their smartphone while in store.
WHAT SHOPPERS WANT
What shoppers want:
Health & Wellness
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80% of Canadians believe there is a lot they can do with food and nutrition to
prevent illness with 73% reporting actively making changes in their lifestyle to be
healthier.
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Nearly 70% of shoppers believe their supermarket stocks healthy meals and want
grocers to highlight healthy food options.
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76% of Canadians are paying increasing attention to food labels, however only a
small percent are following guidelines.
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Opportunity for retailers to become the centrepoint of health and wellness for
consumers, though offering a whole range of health related services i.e. health
screening, nutrition counseling, wellness planning, etc.
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Emergence of retailer driven programs, private label extensions i.e. Loblaws
“Guiding Star” program, “Blue Menu” line, Walmart “Great for You” initiative.
Walmart Live Better
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Walmart Canada is launching the Walmart Live Better magazine in
partnership with Rogers Media.
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Content will be tips and information focused on food, home, beauty, health
and fashion and will be in stores across Canada in April 2013, published six
times per year.
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Circulation of the print magazine will be one million copies, and will also
live online, on tablets and smartphones.
“Walmart Canada is a shopping destination for 89% of moms in Canada, and 20
million people visit our supercenters every month. Through the Walmart Live
Better magazine we can share information that adds value for our customers.”
Emma Fox, CMO Walmart Canada
Nestle- Nutrition QR Codes
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Nestle stated it intends to put QR codes on all its products worldwide to provide
customers with nutrition information , facts.
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Rollout/test will start in the U.K. and Ireland with its multipack two finger Kit Kat
bars.
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Consumers who scan the QR code can obtain nutrition information, learn how the
product fits into a healthy lifestyle, as well as get portion guidance and recipe ideas.
What shoppers want:
Focus on Fresh
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Fresh is fuelling growth in grocery.
– Fresh represents 33 %of grocery store sales.
– Basket sizes were found to be 1.5 to 2 times larger with fresh.
– Consumers are being conservative with spending on consumer packaged
goods.
– 53% of consumers look for quality fresh when deciding where to shop.
– Convenience has also made fresh offerings a priority:
• Alimentation Couche-Tard Inc., which operates Couche-Tard, Mac’s and Circle K,
has also made the move toward fresh foods, aiming for it to account for 25 per
cent of overall sales eventually.
Longo’s
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Focus on great value, freshness and
convenience:
– Veggie Bar
– Salad Bar
– Made to order Pizza oven,
sandwiches
– In-store coffee bean roasting, etc.
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Providing one-stop shop with
premium experience:
– “The Loft by Longo’s” cooking school
– Corks Wine & Beer Bar- features
local beers and wines
– Pharma partnership with Guardian
What shoppers want:
Focus on Local
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Canadians are most likely to buy Canadian food products when grocery shopping
for vegetables (91%), fruit (86%), poultry (84%), cheese (81%), and beef (78%).
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Interest in building a healthy feedback loop wherein the community buys from
local merchants who then reinvest in the community via job creation, supply
procurement, etc.
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Importance factors cited for buying Canadian food when grocery shopping is
supporting Canadian producers (28%), Freshness (14%), the environment (10%),
and safety (9%).
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Research shows that consumer advertising and in-store promotion encourage
consumer demand for Ontario grown food. Examples regionally:
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Fooland Ontario
Aliment du Quebec
Eat Atlantic (Coop)
Choose Atlantic (Sobeys)
What shoppers want:
Heritage & Artisanal
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Dairy case is a thriving place to enhance appeals of heritage food— yogurt,
cheese and butter, with fresh thinking for today’s consumers who want health
and food authenticity.
– Yogurt traditionally was typically plain and healthy decades ago, before the category
evolved into many sugar-laden varieties.
– Greek yogurt uprising has changed the category- now accounts for about onethird of U.S. yogurt sales, driving category sales.
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Brands are providing options that satisfy consumer demands.
– Sargento has created sub-brands of artisan and chef blends that give an image of
limited editions of old-style recipe cheeses.
– In butter, Land O’Lakes has varieties with olive oil and sea salt or honey butter
and emphasizes it is a farmer-owned cooperative that fresh-churns its butters.
WHO IS SHOPPING
Who is shopping:
Emerging Ethnic Demographic
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Statistics Canada forecasts that by the year 2031 visible minorities will make up
31% of the population.
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Immigration shift from primarily European to Asian (61% of Immigrants in
2005), and a marked increase from Central, South America, Africa as well as
India.
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New retailers opening to target to both new and old immigrated generations.
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Strategy considerations:
– Ethnic focused retail categories and departments within conventional outlets.
– Ethnic focused marketing initiatives in an effort to sync new food offerings and
meal solutions to existing flavour profiles and ingredient usage of this growing
community.
– Integration into existing buying and consumption behaviours- everyday use.
Who is shopping:
Millennial- New Generation, New Habits
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Millennial (Gen Y) make up 26% of Canadian population (8 million people).
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Different resources and influences (online, more dependence on others peoples
opinions and shopping experience), and tend to shop in mass retail
environments.
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Demand for a new type of shopping experience- store within a store vs.
departments, group like styles together, within or cross departments.
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Social media and mobile devices impact on how Millennials interact with
brands.
– Nearly half of Millennials (44%) surveyed are willing to promote products or
brands through social media in exchange for rewards.
– Over one quarter of Millennials (27%) expressed high interest in using a mobile
device as a substitute for carrying a plastic loyalty card versus 9% of nonMillennials.
Who is shopping:
Primary Shopper Shifts
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Men are emerging as the primary shopper:
– In Canada, Men are the primary grocery shoppers in 25% of households, up from
20% in 2006.
– This is attributed to the rise in male-only households (single, divorced or widowed
men), and increased male participation in house work.
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Men shop differently:
– More men are willing to take on the weekly ritual and fill-in shops between,
women are still responsible for meal planning and preparation in 80 %of
households.
– Men tend to shop faster in store, less likely to ask questions of check price tags.
– 75% of men asked commented they wanted to share in grocery decisions.
Male Shopping Experience
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Shift in how retail appeals to specific
single sex shopper- from promotional
to in-store experience:
– TV advertising focused to males i.e. P&G
featuring a man doing laundry
– Advertising efforts on male dominated
outlets i.e. Longo’s radio ad’s on Q107.
– “Single-sex aisles” dedicated to male
shopper i.e. Macy’s, testing station for
men at Duane Reade in the U.S.
WHERE WE SHOP
Where we shop:
Canadians Consumers Heading South
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Changes in duty free exemption policies coupled with dollar close to par
have impacted Canadian cross border shopping habits.
– Visitors who stay for 24 hours can now bring back $200, compared with the
previous limit of $50. Those staying for 48 hours can bring back $800.
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The number of overnight trips by automobile rose 2.2% to 3.4 million,
the highest quarterly level since the third quarter of 1992.
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Overall, Canadian travelers increased their spending outside the country
by 1.5% to about $8.5-billion.
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U.S. retailers capitalizing on trend: 'stay longer, spend more, save more‘.
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The cross-border price gap between that exists on many consumer goods
is about 14% on average (CDN at retail price vs. US at retail price, same retailer).
Where we shop:
Emergence of Ethnic Focused Retailers
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T&T
– Loblaw Companies purchased T&T Supermarkets in July 2009 .
– Canada’s largest ethnic grocer with 20 stores in BC, AB an ON as well as two Osaka
stores in BC.
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Oceans
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Small price focused retailer based out of Mississauga, with 2 stores in Mississauga
and 2 in Brampton.
Nations
– High end retail concept including European, Middle Eastern, Caribbean and Asian
demographics.
– Over the next five years, company is looking to open 10 stores.
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Marche Adonis
− Mediterranean and Middle East clientele in the Montreal area with its five stores.
– Metro purchased a 55% interest in Adonis in October 2011.
– The partnership will allow the Adonis brand to expand into the Ontario market,
scheduled to open a Toronto location in 2013.
Where we shop:
Ethnic Integration into Conventional
Loblaws- T&T production into conventional stores.
Walmart- Scarborough, ON became the
first Walmart in Canada to house an Asian
bakery, fish market and butcher, 40 % of
the outlet’s clientele is Asian.
Where we shop:
Store Format Shifts
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Emerging Specialty stores with focus on fresh, service vs. volume and price.
– Shoppers are not only buying products, but are buying the overall experience.
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Major department stores and grocery chains are entering into partnerships with
brands with their own branded shops- i.e. Store within a Store.
– Allows for both brands to leverage the power of each other- creates a synergy
between them, exploiting foot traffic and filling holes in product selection and
real estate.
– A way for retailers to get a pulse check into potential market success/failure.
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Increase trend in Pop Up and Virtual Retailing:
– Enables a brand to increase footprint at a fraction of the cost considering
increased usage and competition from online sites.
– Provides PR opportunities.
HY Louie
Fresh Street Market
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Introduced new concept store: “Fresh Street
Market” with a focus on unique, affordable
fresh food.
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Source local as priority, within Canada as
secondary and then globally.
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Private Label: “Chef Destinations”.
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Opened initial store in West Vancouver,
plans to expand within GVA presently with
the goal to open 3 stores per year.
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Plan is to convert all MarketPlace IGA stores
to this concept in the future.
Where we shop:
Little Big Box Stores- Rona
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Over the next two years, the retailer plans to close 10 big-box stores
(approx. 100,000 sq. ft.) and resize 13 other locations to a smallerfootprint format of about half the size.
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It plans to open 15 new medium-sized (approx. 35,000 sq. ft.) locations
across the country along with 10 super-small satellite stores, averaging
about 6,000 square feet of retail space.
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Benefits of shift:
– More intimate shopper experience- environment and service
– Increased accessibility and reach- within urban centers, new shopper
audience
Store within a Store:
Kroger Grocery Store & Murray’s Cheese Shop
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Murray’s, the beloved New York cheese shop that Forbes magazine calls “The
world’s best”, entered a store-in-a-store partnership with America’s largest grocer,
The Kroger Co, in 2009.
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With both of these brands partnering, Murray’s was able to meet Kroger’s clients
face to face while Kroger benefited from the renewed interest in their cheese
offering.
“Sales increases were
significant, when the specialty
cheese departments in those
stores were replaced with
Murray’s, sales rose 50% to
100%.”
Robert Kaufelt, President,
Murray’s Cheese
Store within a Store:
The Shops at Target
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Target will fill mini in-store shops with handpicked specialty boutiques from
around the country.
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After six weeks Target will switch out the current shops with a new group of
boutiques.
Where we shop:
Virtual Retailing
Procter & Gamble
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Right time, right place for the
consumer.
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Located inside a Toronto building
near a subway station and consists
of photographic representations of
products.
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Features 120 P&G products including
Pampers diapers, Tide laundry
detergent and Crest toothpaste.
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Consumers use their smartphones to
scan product QR codes and
complete their electronic checkout.
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Products are delivered to
customers’ home with no additional
charge.
Where we shop:
Virtual Retailing
Mattel & Walmart
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Two walls of 3D toy images
featuring brands like Barbie, Hot
Wheels and Fisher-Price.
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Free shipping on purchases.
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Targeted to reach both moms and
dads who would be typically going
to Walmart Canada as well as busy
people who don’t traditionally have
time to get to a mall.
Where we shop:
Pop Up Retailing
Boardshorts Vending Machine
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Vending machines containing limited edition
Quiksilver boardshorts and bikinis can be
found at The Standard Hotels in Hollywood,
Los Angeles, New York, and Miami.
After Party Shoes Vending Machine
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Vending machines conveniently located in
clubs and restaurants around London sell
comfortable after party Rollasole ballet flats.
Where we shop:
Rewarded for Loyalty
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94% of Canadians belong to at least one loyalty program.
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Customer retention has become more difficult and building customer loyalty is
challenging.
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Too many companies are focused on using the customer information they
have to boost weekly product sales, rather than making a fuller assessment
about what their customers’ needs are.
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Getting to know their customers’ preferences and habits better in an effort to
cultivate a more devoted type of customer and increasing sales.
“What merchants generally do is eliminate the least profitable product or slowest selling product. But if you add a
customer filter to that, you ask, what are my best customers buying? If you discover that the product you were thinking
of de-listing was actually bought by 50% of your best customers, maybe you would make a different decision at that
point — you don’t want to alienate your best customers.”
Bryan Pearson, Chief Executive
LoyaltyOne’s
Loblaw- PC Plus
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Engagement through website
and/or mobile app.
– Free PC Plus card available at stores,
scan during transactions or use
mobile phone to scan.
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Log in to view and interact with
personalized content:
– Special targeted offers
• “Time to event modeling”
• “Stretch Offers”
– Recipe recommendations
– Shopping list tool
– Account history/transactions
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Offering more than rewards- part of
shopping experience.
Target Canada- REDcard
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Program offers shoppers instant 5% savings at the time of purchase with
the REDcard products including the debit card and Target RBC
MasterCard.
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The additional savings earned in store will be instantly applied at the time
of purchase and will apply to almost everything in the store.
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Departure for Canadian retail loyalty programs, which have traditionally
been based on points vs. immediate cash discounts.
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In the US, the 5% discount offered to REDcard users usually closes most of
the price gap between Target and Walmart prices.
Summary
• HOW WE SHOP
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Shift in Household Size
Increase in Shopper Frequency
Shift in Economic Outlook
Shopper Influencers
Decision Making at Shelf
• WHAT SHOPPERS WANT
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Health & Wellness
Focus on Fresh
Focus on Local
Heritage & Artisanal
• WHO SHOPS
– Emerging Ethnic Demographic
– Millennial- New Generation, New Habits
– Primary Shopper Shifts
• WHERE WE SHOP
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Canadians Consumers Heading South
Emergence of Ethnic Focused Retailers
Store Format Shifts
Rewarded for Loyalty
QUESTIONS/DISCUSSION