New Canadians prefer Walmart, Costco and No Frills for buying groceries
Newcomers to Canada are driving a new wave of demand, and grocers are eager to seize this growing opportunity. However, the challenge lies in understanding the diverse needs and preferences of new Canadians. To help grocers get it right, Leger has released part two of its study, Cracking the Newcomer Code.
While the first iteration looked at the broader challenges newcomers face, the second wave zeros in on the grocery sector, surveying 2,100 immigrants who arrived in the past 10 years about their shopping habits and preferences.
Where and how newcomers shop
When it comes to where newcomers prefer to shop, Walmart leads the pack (24%), followed by Costco (20%) and No Frills (12%).
Most newcomers prefer to shop in store (82%), while 10% said they mostly shop in store and occasionally shop online. Another 5% said they prefer online grocery shopping with store pickup.
“Given the economic realities and challenges that all of us face, and in particular newcomers, it’s not surprising to see where newcomers gravitate to when thinking of grocery shopping,” said Luc Dumont, senior vice-president, consumer insights at Leger, on a recent webinar highlighting the findings.
While seven in 10 newcomers settle in Canada for economic reasons, including the promise of a better standard of living, “many face significant financial strain, struggling to achieve the stability that they hoped,” noted Jaismin Harnega, research director, public affairs and communications at Leger. On average, it takes 19.6 months for newcomers to feel financially self-sufficient.
What drives their grocery decisions
Beyond the where, the factors influencing newcomers’ purchasing decisions were also examined. When choosing a grocery retailer, price is the number-one factor (78%), followed by discounts and promotions (57%), location (56%), product quality (55%) and availability of products from their home country or other ethnic products (24%).
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In addition, 40% said they seek out grocery retailers that are specifically tailored to new Canadians and 61% agreed their cultural background influences their purchasing decisions. However, 44% said it was challenging to find grocery products that meet their cultural or dietary preferences.
“Younger Canadians aged 18 to 34 and visible minorities, particularly South Asians, faced the most difficulty in finding these products,” said Dumont. “So… there is room to improve there.”
How retailers can attract new Canadians
When asked how grocery stores can attract new Canadians, 54% of respondents suggested offering loyalty programs, and 53% recommended stocking more multicultural products.
“Loyalty programs are a way for retailers to make people feel like they’re being given back to,” said Dumont, adding that this ties into the shift to discount and getting more value.
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Other recommendations from newcomers include having an inclusive workplace for all ages and backgrounds (32%), providing multi-language support (26%), training staff on cultural competence (24%), advertising in ethnic media (14%) and hosting community events (13%).
Dumont noted that while three quarters of newcomers say their preferred store offers a good variety of multicultural products, only half feel that the staff is knowledgeable about these products.
Retailers that stock multicultural products “are on the right track,” he added, “but you really have to have a workforce that can talk about them, advise people and provide recommendations. So, there’s room to enhance that experience.”
The loyalty play
Building on the importance of loyalty programs, the study delves further into how newcomers are engaging with these offerings across various sectors.
“Not unlike all Canadians, newcomers have embraced loyalty rewards programs, with nearly all belonging to at least one loyalty program,” said Harnega. The most popular loyalty program overall is PC Optimum (62%). Rounding out the top five are Costco (45%), Scene+ (44%), Amazon (33%) and Tim Hortons (32%).
Nearly three quarters of newcomers said they are likely to switch retailers for better loyalty rewards. “This presents a challenge or risk, but also an opportunity for retailers to keep their loyalty programs competitive and attractive,” said Harnega.
