How Millennials Are Changing the Grocery Store

Here's why fewer and fewer millennials are going grocery shopping.

Next time you run to the grocery store for bread and milk, you might find yourself staying for a champagne tasting. Or seduced by Comice Pears. Or perhaps you’ll just stay home and cook the elicoidali pasta and mascarpone cheese from your Blue Apron box.

The digital age has changed how we shop for everything, and now food is front and center on the disruption list.

It’s hard being an old-fashioned grocery store these days. Adults, for the first time since such data was recorded, are spending more money eating out than cooking in. But even when they do buy their food, the market is enduring what analysts coldly call “grocery channel fragmentation.”

Pam Danziger, a luxury goods expert, said simply that young eaters are on the hunt for something “distinctive and different.”

Small, boutique food shops that are part-restaurant, part-brew pub, part-exotic grocer are all the rage.

“I find more and more that millennials are looking for special experiences,” said Danziger, author of the book Shops That Pop. “They are not just looking for products. They want a better quality service experience from people who really know their stuff.”

They don’t just want a good pear. They want to know why that pear goes great with that salad. And they might even want to know who grew that pear.

“There’s nothing like going to specialty wine store where [workers] can really advise you on what you are getting,” she said. “This has happened with food now.”

It’s not just happening in hip urban areas on the coasts. Danziger points to small independent food retailers, like Dorothy Lane Market, in Dayton, Ohio, (with its Comice “Holiday Pear”) as examples of a national trend that seems to have staying power.

The do-everything grocery store is struggling to stay relevant in this environment — that’s why shopping carts have cupholders for craft microbrews sold by the growler now — but don’t make the mistake of thinking huge grocers have always ruled the food world. They are a relatively recent development, dating back to the 1930s, when food preparation time shrank as more women entered the work force. Specialty grocers echo a time before that, Danziger said, when everyone “bought local.”

“In the 30s, everyone went to the local butcher,” she said. “What is old is new again.”

Web-Surfing for Groceries?

Well, not everything. On the other end of the digital spectrum, consumers are increasingly skipping the shopping trip altogether and letting the specialty groceries come to them.

Home delivery isn’t new either: Firms have been trying to find the right formula to ship cereal and produce to homes since the beginning of internet time (Remember Webvan? Perhaps you’re not old enough). Blue Apron and competitors like Hello Fresh and Plated seem to have hit on a winning formula by combining the convenience of delivery with the quest for special experiences.

Unless you’re living under a rock or are over 38, meal-in-a-box firms neatly package ingredients and recipes with dry ice, and send it to your home with simple preparation instructions. For about $10, a fairly small meal and about 30 minutes of work, aspiring chefs can feel like culinary experts.

The rise of the meal-in-a-box business has been meteoric. Blue Apron said it delivered 500,000 boxed meals in 2013, and now it delivers 8 million boxed meals a month. HelloFresh, a German competitor, is eyeing a possible public offering next year.

“I don’t think we’ve seen shopping change so dramatically ever,” Marty Siewert, senior vice president for consumer and shopper analytics at Nielsen, told the Wall Street Journal. “Those things in the past that have been real drivers for grocery in terms of freshness and quality aren’t the key drivers for millennials.”

All these changes are occurring against a dramatically different grocery landscape. The Food Marketing Institute’s annual report is full of data showing how grocery shopping is in the midst of a revolution. For example, the days of one member of a household buying the food at one nearby grocery store are essentially over, the FMI said.

“Shoppers increasingly rely on a broader number of less traditional channels, or claim no retailer as a primary store,” it noted in its report.

Meanwhile, the majority of households now employ “co-shopping” or “shared shopping.” That means both partners in a marriage buy groceries — often because one doesn’t agree with the other’s taste in food, the report said. That means more trips to more stores.

“Traditional grocery store as a primary channel has dipped to just below half of all shoppers,” the report said.

Online shopping is still small but growing. While only 5% of shoppers say they use online-only retailers “regularly,” another 15% say they have done so occasionally, up from 11% in 2015. When you ask only millennials, the market segment uptake is even more impressive: 28% of those 18 to 37 have bought groceries online.

Frugal Foodies

Digital is driving food shopping in other ways, too. Nearly 60% of millennials say they use digital coupons, and 66% say they look up recipes online while shopping. (If you’re looking for frugal meals, by the way, try this 16-cent breakfast.)

And lest you think they are only shopping for high-end arugula, one factor still trumps all others for food shoppers both young and old: price. That holds true for co-shoppers and specialty shoppers alike. All those groups say lower prices are the biggest factor in where they’ll shop, with nearly twice as many shoppers prioritizing savings over variety and quality.

Still, Danziger is sure that food consumers want more than iceberg lettuce and white bread, and the retailers who give them better experiences will survive the changes.

“People are looking for a higher quality of life, that’s what this is all about,” she said. “Retail success will be less about what you sell and more about how you sell it.”

No matter how you choose to grocery-shop, it’s important to stay on budget. High levels of debt, related to artisanal cheese or otherwise, can hurt your bank account and your credit. You can see where your credit stands by viewing two of your free credit scores, updated every 14 days, on Credit.com.

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10 Cars Young People Are Buying

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The Fear That Can Make a Mess of Your Finances For Years

A credit card statement may feel daunting, but that’s not what scares many millennials. According to a recent Capital One survey, a quarter of this demographic said their biggest financial fear is building a good credit score, something they considered even more nerve-wracking than asking for a raise or having a serious money talk with their partner.

The survey, conducted online last March, polled just over 1,000 millennials, with almost half of them saying the main reason they carry a credit card is to build solid credit. Knowing it’s crucial to establish good credit, it’s no wonder they view this as such a scary milestone. Still, turning a blind eye to credit scores could cause problems down the road, since having no credit or, worse, bad credit can make it harder to get affordable financing.

What Does Affect Your Credit Score

When building good credit, it’s helpful to know what can really impact your score. This knowledge can certainly make credit scores seem less daunting. Here are the five major factors.

  1. Payment History: Creditors look at how often you pay debts on time, if you’re late or miss payments altogether. A habit of not paying on time can cause you to be seen as a risk, in turn hurting your credit.
  2. Amount of Debt: Debt isn’t always a bad thing, as long as it’s managed responsibly. However, too much of it can negatively impact your score.
  3. Variety of Accounts: This can include credit cards, student loans, car loans or any other type of debt. Lenders look to see if you can handle different types of debt, so only carrying credit cards may prevent you from earning a higher score.
  4. Credit History: This is a track record of your credit choices. Poor ones can impact your credit for some time, if you don’t take steps to correct them.
  5. Age of Accounts: Millennials are likely fairly new to building credit, so they won’t have a long history of accounts. Time is the main way to improve this.

Keeping an Eye on Your Credit Score

Building a strong credit score can be beneficial as you start to look at making major purchases like a car or house. Credit reports are even something that many employers look at before hiring someone, which only 22% of survey respondents knew.

To get on the path to the best credit score, you need to know where your credit stands. To do so, you can get your credit report from AnnualCreditReports.com, which you can do for free once a year. After reviewing your report, you can start taking steps to improve your score. You can see two of your credit scores for free each month on Credit.com and monitor how your hard work is paying off.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

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The Vast Majority of Millennials Are Saving Their Money

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The Internet is rife with research on young Americans, aka millennials, though it sometimes draws conflicting conclusions. It’s easy to find papers saying millennials are financially irresponsible while plenty of others say just the opposite. Perhaps that’s why no one can agree on who millennials are. Some define them as adults in their 20s, adults between the ages 18 and 29, those born after 1982 or, more broadly, those who came of age at the turn of the century.

However you define them, companies have reason to figure out this large group of consumers, as they’ll be driving the economy for decades. The latest paper to join this stack is Navient’s “Money Under 35” survey, in which the student loan servicer explores the finances of those between ages 22 and 35. (The report is based on a survey conducted between July 16 and August 5 on more than 3,000 consumers.) Here’s a look at some of its most interesting findings.

Millennials Are on Top of Their Finances:

Student Loans Are a Common Burden:

  • 57% who attended some college have student loans; 46% are in debt.

But They Aren’t Quite Holding Them Back:

  • Those who borrowed for college are just as likely to have a mortgage as those who didn’t, with one exception. Those who borrowed but didn’t get their degree, and especially those still in debt, are much less likely to have a mortgage than those who didn’t obtain a degree or borrow (or are debt-free).

Education Impacts Their Ability to Pay Bills:

  • The median income for those without a college degree is $42,500. It’s $51,080 for those with associate’s degrees, $62,500 for those with bachelor’s degrees and $95,000 for those who earned advanced degrees.
  • Most (57%) student loan borrowers with outstanding balances who didn’t receive degrees or earned associate’s degrees report having trouble making their payments. Only 34% of debtors with bachelor’s degrees report such struggles, while 40% of adults with student loan debt for an advanced degree struggle to make payments.

Gender Plays a Big Role in Earnings & Debt:

  • Men earn between 5% to 53% more than women, depending on their field of study.
  • Women are more likely to have auto, mortgage and credit card debt.
  • Men are more likely to have student loan debt, as 36% of men are borrowers compared to 32% of women.

Overall, Millennials Are Doing OK:

  • Using a custom financial health index, which considers 15 aspects of a person’s finances, the assessment found that 20% of young adults have excellent financial health, 63% have good financial health and 17% have poor financial health.
  • Education level significantly impacts where a person falls on the index, with more education increasing the likelihood of excellent financial health.
  • The most common goals for young people are to spend time with family (29%), be happy (28%), become debt-free (24%) and own a home (12%).

Even within one report, it’s easy to see there are mixed reviews of millennials’ financial well-being. They’re saving but struggle to make bill payments. They’re considered financially healthy but dealing with debt. Navient’s report is by no means definitive, but it’s interesting to see how young people respond to these surveys, especially given concerns about student loan debt and how it affects their role in the economy.

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