Posted: 03 Nov. 2022 8 min. read

Can grocery stores keep their shoppers healthy?

By Jay Bhatt, D.O., executive director of the Deloitte Health Equity Institute and the Deloitte Center for Health Solutions, Deloitte Services LP 

Inflation is having a significant influence on the foods we buy, according to Deloitte’s annual report on fresh food. While price is a major factor in purchasing decisions, the vast majority of grocery shoppers (84%) still consider health and wellness when buying fresh food, and 55% are willing to pay more for foods that could boost their health and wellness (see Fresh food as medicine for the heartburn of high prices). The report is based on a survey of more than 2,000 US adults.

Healthy food is a key driver of health, but many people can’t afford healthy food, don’t have access to grocery stores, or don’t see the connection between their food choices and their health. Food insecurity is typically the most common health related social need (see Addressing the drivers of health). An unhealthy diet is a leading risk factor for death because it can exacerbate some chronic health conditions, according to the US Department of Agriculture and the Centers for Disease Control and Prevention. People who see the connection between food and health are more likely to make healthy food choices.

My colleague Daniel Edsall is the co-leader of Deloitte’s Global Grocery practice and co-author of our report. I recently talked with Daniel about the unique role grocery stores can play in the health care ecosystem. Here is an excerpt from that conversation:

Jay: What surprised you most when conducting this research?

Daniel: We weren’t surprised to see that inflation is changing the way people shop for groceries. Grocery prices are under pressure. One thing that stood out is that people continue to prioritize fresh food as part of their health regime. They are willing to spend more on healthy foods even if their overall grocery budget is diminishing. Many shoppers are willing to spend more on food that can act as medicine.

Jay: Are there situations where inflation is pushing people to make different choices?

Daniel: The less income you have, the more price is a factor in food choices. A family that has an annual income of $170,000 a year is feeling the impact of inflation. But higher food prices probably aren’t having a significant impact on their purchases because the grocery budget isn’t a major part of their overall income. Families with lower incomes, however, are having to make more trade-offs. But even people who are on SNAP [Supplemental Nutrition Assistance Program] want food that is healthy and nutritious. Grocers don’t want people to trade down to less healthy food choices. That puts pressure on them to improve the supply chain and reduce production costs so that they can help drive healthier outcomes for their customers.

Jay: Trade-offs are an issue whether you are shopping for food or health care. Are there parallels between how consumers shop for food and how they shop for health care?

Daniel: The challenge is in understanding what you're buying and what impact it will have on you as a consumer or as a patient. The flavor and gratification elements of food are easy to understand. But understanding the long-term impact those foods have on health is a lot more complicated and requires a little more brainpower. The health care industry has a duty to educate consumers and explain the long-term impact of their health care choices. The grocery industry has a similar challenge.

Jay: What can grocers do to help their customers choose healthier foods? Is there a potential competitive advantage there?

Daniel: What retailers have is a brand, reputation, and location. But location is becoming less relevant. Online food purchases, home food deliveries, and meal-kit subscriptions have given shoppers a way to avoid the grocery store. Grocers have made huge investments in their brick-and-mortar locations. To operate profitably, they need to give people a reason to go to the store. That’s why pharmacies are often located in a grocery store. If someone has to pick up a prescription, they might as well pick up some groceries, too. Grocers continue to create reasons for people to come into the store. Helping people improve their health might be another way to get people into the store. Grocers who show the relationship between fresh food and its health outcomes can be better positioned to win over consumers and compete on something other than price. The grocery industry is realizing that helping customers make good food choices could generate more loyalty to their brand. To help ensure that, they should have the health of their customers at heart.

Jay: Would you classify grocery stores as health companies?

Daniel: Grocery stores are heavily involved in the health value chain. Along with selling fresh food and pharmaceuticals, a grocery store might also suggest certain foods for customers who have a chronic condition…as long as the store has the customer’s permission. Some grocery-based pharmacies are beginning to make clinical trials available in their stores (see Retail clinics may be the next frontier for clinical trials). This could give shoppers access to new medicines and offer pharmaceutical companies access to a broader group of trial participants. At the same time, some retail pharmacies are starting to sell groceries, including fresh foods.

Jay: According to our research, 2 out of 5 consumers don’t clearly understand which types of fresh foods can act as medicine. What can grocers do to help their customers understand the connection between food and health?

Daniel: We all have an angel and a devil on our shoulders when we go to the grocery store. The devil is telling us to buy the good tasting foods that have a lot of fat, or sugar, or salt. That’s the animal side of our brain that wants instant gratification. But the angel is telling us that those foods could make us feel bad or cause us to gain weight. The grocer should help the angel and be there when purchase decisions are being made. Guiding Stars [a “nutritional navigation” system developed by food retailer Ahold Delhaize USA], uses labels to help shoppers identify nutritious foods. The system is used by several national grocery chains. Some grocers have developed food-rating apps that provide customers with nutritional advice as they shop.1 Such apps can push people toward a healthier mix of foods in their basket. The more food companies and grocers can do to remove complexity and help customers make healthy choices—as opposed to forcing them to make lots of small decisions around ingredients—consumers will likely be happier and likely healthier. Offering a healthy recipe or meal kit in the store can make shopping easier for a consumer. Sometimes people just want foods that they can make quickly…but those foods can be healthy, too.

Jay: Some survey respondents said they trust their grocer to provide personalized food-based health recommendations. What role could grocery stores play in the health of their customers?  

Daniel: Increasingly, retailers are taking on a bigger role in health. There is a huge amount of data about what people buy and their food preferences. There is also data about the prescription drugs they buy. This information, for example, could help grocery stores suggest foods that could help improve the health of a customer who has a chronic condition.  People want to be healthy, but they also want delicious food, value, and convenience. Those things don’t need to be mutually exclusive.

[Separate research from the Deloitte Center for Health Solutions found that consumers are more willing to seek care from a health system that has relationships with trusted businesses in their community, including grocers. See Rebuilding trust in health care.]

Jay: If I were to jump five years into the future and walk into a grocery store, what would I find most striking? 

Daniel: The first thing you’d notice is that the store looks much different. You won’t see people walking up and down the aisles searching for a few items among 40,000 products.  Instead, shoppers will choose from a customized assortment of items based on their preferences. Some items will be pre-selected based on the customer’s shopping history. The shopping experience will be more like going to a restaurant. It will be convenient and much more personalized than it is today. You will also see more fresh, healthy, and inspiring food options. You might go to the grocery store because it’s a comfortable place to hang out. You might go there to see your primary care provider, an optometrist or to pick up a prescription. And you probably won’t need a shopping list. Instead, a personalized avatar might act as your concierge.

Jay: What role might an avatar play in grocery shopping?

Daniel: We see the avatar as being a lot like your mom. When you were a kid, your mom knew what foods you liked and which ones you didn’t, and she knew where everything was. She understood your health needs and she knew your schedule. Mom was the first line of defense from a health care perspective. That’s the role the avatar would play, and I think that's where we're headed. The more grocers know about their customers, the more they can help provide that personalized experience. The less work customers have to do to meet their basic needs, the more time they will have for other things.

White House connects food to health

The Biden administration recently announced its goal of ending hunger, reducing diet-related illnesses, and addressing health disparities by 2030.2 Strategies include nutritional education for people who are enrolled in Medicaid and Medicare, updated labeling to make it easier for consumers to identify healthy foods, and incentives that encourage people to buy more fruits and vegetables.

This is an ambitious goal and changes will likely need to be made inside and outside of the government to achieve it. Many grocery store chains, along with the National Grocers Association, have joined this effort.3 Kroger, for example, is working with the Rockefeller Foundation and the American Heart Association to build a national Food as Medicine research initiative to “improve the health of Americans, reduce health care costs, and improve health equity."4

Grocery stores and food producers—along with health care and life sciences companies—all have a role to play in improving our health.

This publication contains general information and predictions only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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Endnotes:

1  Kroger launches OptUp app, Kroger press release, July 16, 2018

2  Biden-Harris Administration National Strategy on Hunger, Nutrition, and Health, The White House, September 2022

3  Grocery industry aligns behind White House’s anti-hunger plan, September 28, 2022

4  Kroger joins White House Conference on Hunger, Nutrition and Health, September 29, 2022

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Jay Bhatt

Jay Bhatt

Managing Director Center for Health Solutions and Health Equity Institute

Jay Bhatt, D.O., MPH, MPA is a physician executive, internist, geriatrician, and public health innovator. As Executive Director of the Deloitte Center for Health Solutions (DCHS) and the Deloitte Health Equity Institute (DHEI), Dr. Bhatt directs the research, insights, and eminence agenda across the life sciences and health care industry while driving high-impact collaborations to advance health equity. He is a prominent thought leader around the issues of health equity, health care transformation, public health, and innovation. Passionate about patient care, Dr. Bhatt will continue practicing medicine at local community health centers in Chicago and Cook County while serving in his leadership role at Deloitte. Prior to joining Deloitte, Dr. Bhatt was senior vice president and chief medical officer at the American Hospital Association. While there, in addition to his enterprise role, he served as president of the Health Research and Educational Trust and helped lead the Institute for Diversity and Health Equity. His early work in health care involved practicing primary care at Erie Family Health Center, sitting on faculty at Northwestern Medicine, acting as chief health officer of the Illinois Health and Hospital Association, and serving as managing deputy commissioner and chief innovation officer for the Chicago Department of Public Health. Dr. Bhatt earned a B.A. from the University of Chicago; Doctor of Osteopathic Medicine (D.O.) from Philadelphia College of Osteopathic Medicine; Master of Public Health from the University of Illinois at Chicago; and Master of Public Administration from the Harvard Kennedy School of Government as a Zuckerman and Commonwealth Fund Minority Health Policy Fellow. He is board certified in Internal Medicine and Geriatrics. Dr. Bhatt's work has earned the attention of top media outlets seeking his expertise. He is a recipient of the Harvard Kennedy School Alumni Award, a Presidential Leadership Scholar, and an Aspen Institute Health Innovator Fellow.