The balance of food sales by 2013 will tip in favor of general merchandise-focused retailers retailers whose sales of food and consumables represent less than two-thirds of their business according to a recent web-based seminar by Willard Bishop Consulting and The Food Institute, Elmwood Park, N.J.
If the current trend continues, food-focused retailers, e.g., supermarkets and limited-assortment stores, will drop from the 52 percent share they enjoyed in 2004 to a 40.2 percent share in 2013, according to our estimates, reported Jim Hertel, senior vice president of Willard Bishop. At the same time, general merchandise-focused retailers, e.g., supercenters, mass, drug, club, and dollar stores, will increase their share from 31.9 percent in 2004 to 43.5 percent, surpassing food-focused retailers.
This is a dramatic shift from the days of supermarket dominance when more traditional food stores sold about 90 percent of all food and consumables in the U.S. [according to 1988 figures], said Bill Bishop, president of Willard Bishop. Manufacturers and suppliers of food and consumables need to understand the implications of this trend. It is critical for them to build trade plans and strategies to address their shifting retail customer base.
Supercenters continue to gain share, going from a 14 percent share in 2005 to a projected 17.3 percent by 2009. Discounters including club stores, supercenters, dollar stores, mass merchandisers, super warehouse stores and limited-assortment stores now represent more than 30 percent of the total market, up from 25 percent in 2000.
A more extensive food offering in mass merchants has leveled their share loss in food and consumables to 5.5 percent.
However, two types of food-focused retailers are gaining tiny share points:
- Limited-assortment stores are expected to grow from a 2005 share of 1.7 percent of the market to a 2 percent share in 2009.
- Fresh stores are expected to grow from a 2005 share of 0.7 percent to 1.2 percent in 2009.
For purposes of the study, food-focused retailers do more than two-thirds of their business in food and consumables, while general merchandise-focused retailers do less than two-thirds of their business in food and consumables. For more information, see www.willardbishop.com.