The Future of Food Retailing in the U.S., 3rd Edition

Published: February 1, 2011 - 266 Pages

Table of Contents

  • Executive Summary
    • Scope of Report
    • Report Methodology
    • A Broad Spectrum of Retail Channels
    • Total Retail Food and Beverage Sales Almost $560 Billion
      • Table U.S. Retail Sales of Foods and Beverages, 2006-2015 (in millions of dollars)
    • C-Stores Outnumber Supermarkets Four to One
    • Supermarkets Ring Up Over Half of 2010 Food and Beverage Sales
    • The Top 20 U.S. Food Retailers
    • Market Outlook
      • Table Top 20 U.S. Retailers by Estimated Food and Beverage Sales, 2010 (in billions of dollars)
    • Some Stores Walloped; Others Thrive in the New Economy
    • Conservative Spending Expected to Continue
    • Consumers Dining Out Less, Cooking More
    • The Overriding Trend: Value
    • More Competition
    • Small Is Big
    • SKU Rationalization
    • Increased Private-Label Penetration
    • In-Store Foodservice
    • Fresh Formats
    • Health and Wellness
    • Sustainability Is Profitability
    • Marketing and Media Trends
  • Introduction - Highlights
  • Introduction
    • Market Overview
      • Scope of Report
      • A Broad Spectrum of Retail Channels
      • Share-of-Stomach Competition Also Includes Foodservice
      • Total Retail Food and Beverage Sales Almost $560 Billion
        • Table U.S. Retail Sales of Foods and Beverages, 2006-2015 (in millions of dollars)
      • Other Estimates in the Same Ballpark
      • Retail Food and Beverage Sales Will Near $700 Billion by 2015
    • Market Composition
      • C-Stores Outnumber Supermarkets Four to One
      • Supermarkets Ring Up Over Half of 2010 Food and Beverage Sales
        • Table Competitive Analysis of Retail Food and Beverage Channels, 2010
    • The Competitive Landscape
      • The Top 20 U.S. Food Retailers
        • Table Top 20 U.S. Retailers by Estimated Food and Beverage Sales, 2010 (in billions of dollars)
      • Recent Mergers and Acquisitions
    • Market Outlook
      • Economic Environment
      • Inflation + Deflation, But Food Prices Projected to Rise in 2011
        • Table Changes in Consumer Price Indexes for Food, 2008-2011
      • Some Stores Walloped; Others Thrive in the New Economy
      • Conservative Spending Expected to Continue
      • Consumers Dining Out Less, Cooking More
    • Government Regulation
      • Food Safety Bill Passes Congress
      • USDA to Require Nutrition Labels on Meat
  • Trend Overview - Highlights
  • Trend Overview
    • The Overriding Trend: Value
      • The Top Consumer Priority
    • More Competition
      • More Types of Stores Focusing on Foods
      • Channel Migration: Who's on the Winning Side of the Equation
        • Table Consumer Packaged Goods Household Penetration by Retail Channel, 2010 (percent)
      • Different Channels Satisfy Different Trip Missions
    • Small Is Big
      • Pendulum Swinging Back to Smaller Store Formats
      • Fresh & Easy Inspired Seismic Market Shifts
      • Walmart Experiments with Several Smaller Formats
      • Walmart Plans Small Format Urban Stores
      • Safeway Also Testing Smaller Format
      • How Viable Are Smaller Stores?
    • SKU Rationalization
      • Product Proliferation Is Rampant
        • Table U.S. Food and Beverage New Product Launches, 2001-2010 (number)
      • SKU Rationalization (or Not)
      • Examples of SKU Rationalization Strategies
      • Walmart Cuts Too Deep
      • How Giant-Carlisle Analyzes Categories
      • Jewel-Osco Slashes SKUs by as Much as 25%
      • Doing SKU Optimization Wrong-and Right
    • Increased Private-Label Penetration
      • Private Label a Top Retail Differentiation Strategy
      • Private Label Ripe with Opportunities
        • Table U.S. Retail Sales of Private-Label Foods and Beverages, 2009-2014 (in millions of dollars)
      • Private-Label Introductions Double in 2010
        • Table U.S. Private-Label Food and Beverage New Product Launches, 2006-2010 (number)
      • Fresh & Easy Leads in Private-Label Introductions
        • Table Top 20 U.S. Retailers/Wholesale Grocers Launching Private-Label Foods and Beverages by Number of SKUs, 2006-2010 (number)
      • Poor Economy Helps Private Label Get Ahead
      • Private Label vs. National Brands
      • Safeway and Supervalu Strengthen PL Hold
    • In-Store Foodservice
      • Food Retailers Morphing into Foodservice
      • How that Translates to Dollars
      • Almost Two out of Three Consumers Buy Supermarket Take-Out
      • Mean Use of Foodservice
      • Foodservice by Usage Occasions
      • Prepared Foods in Supermarkets
      • Walmart Moving into Prepared Foods with Marketside
      • Target Creates Springboard for Prepared Foods
      • Warehouse Clubs to Push the Prepared Foods Envelope
      • Prepared Foods in C-Stores
      • Drugstores Moving into Prepared Foods Territory
      • Turning Grocery Stores into Restaurants
      • A Look at the Future
    • Fresh Formats
      • Emphasis on Fresh Foods Continues to Grow
      • Organic Foods Slowing, But Remain an Area of Opportunity
      • Local and Artisanal Foods Are Growing Trends
      • A Return to In-Store Butchers?
    • Health and Wellness
      • Retailers Becoming Arbiters of Wellness and Nutrition Management
      • Health and Wellness a Marketing Hook
      • Healthy Eating Programs
      • Supermarkets Offering In-Store Dietitians
      • Retailers' Nutrition Ratings
    • Sustainability Is Profitability
      • Ethical Consumerism
      • Retailers Spearhead Animal Welfare Standards
      • Cage-Free Eggs a Hot Button
      • More Retailers and Dairies Go Hormone-Free
      • Fair Trade Going Mainstream
      • Greener Stores
      • Walmart's Sustainability Scorecard Makes Slow Progress
      • Sustainability
      • Plastic or Paper?
      • Tesco Testing Zero-Carbon Supermarket in England
  • Grocery Channel Trends - Highlights
  • Grocery Channel Trends
    • Grocery Channel Leads Food Sales
    • Even National Supermarket Operators are Regional Players
      • Table Top 10 U.S. Supermarket Chains by Retail Dollar Sales, 2009 (in billions of dollars, percent, and number)
    • Kroger: Solid Strategies Mean Solid Gains
      • Kroger Is Sophisticated in Mining Consumer Data
      • Private Label a Competitive Strength
    • Safeway Combines Lifestyle with Price Parity
      • Lifestyle Format Stung by Recession
      • Safeway Experiments with Small Formats
      • Targeting More Private Label
    • Supervalu Realigning Its Business
      • New Focus is Consumer-Centric, Hyper-Local
      • SKU Rationalization, Clean Floor Strategy
      • Supervalu Sells Some Supermarkets; Expands Save-A-Lot Discount Chain
      • Supervalu Targets Consumers with Health and Wellness Options
    • A&P's Struggles Continue
    • While Winn-Dixie Rises from the Ashes
    • Regional Chains Set Exemplary Examples
    • Publix a Public Favorite
      • Publix's GreenWise Market
    • Wegmans Raises the Bar on Grocery Shopping
    • Whole Foods: The Natural Leader Reemerges as a Growth Leader
      • Focusing on Value Yields Rewards
      • Good Deeds
      • New Sustainable Seafood, Animal Welfare, and Healthy Eating Initiatives
      • Strong Focus on Prepared Foods and In-Store Dining
    • Ethnic Food Markets Thriving
    • Specialty Food Stores
    • The Secrets of Trader Joe's
  • Value Channel Trends - Highlights
  • Value Channel Trends
    • Supercenters
    • Walmart Is the Nation's Largest Food Retailer
      • Groceries Grow to 51% of Walmart's Sales
      • Walmart Revamps Great Value Private-Label Brand
      • Economy Hits Walmart Customers Hard
      • Walmart Makes Serious Mistakes…
      • …and Tries to Correct Them
      • Thinking Small, Walmart Is Downsizing Stores for Urban Markets
      • Walmart Testing Pick Up and Delivery Services
    • Target-ing Foods
      • Target Pushing into Fresh Foods
      • And Opening Smaller Format Urban Stores
    • Kmart Still Struggling to Find a Path
    • Warehouse Clubs Maintain Balance, But Not Status Quo
    • Costco Wholesale Corp.
      • Costco Looking to Open More Stores in Malls
    • Sam's Club Seeks to Catch Up with Costco in Foods
      • Sam's Targets Hispanics with Mas Club
    • BJ's Wholesale Club
    • Dollar Stores Adding More Food to Their Product Mix
    • Dollar General Revamping Store Format(s)
    • Family Dollar
    • Dollar Tree
    • Limited Assortment Chains Making Waves
  • Convenience Channel Trends - Highlights
  • Convenience Channel Trends
    • Convenience Stores and Drugstores Filling in for Mom-and-Pop
    • C-stores Changing With-and Changing-the Times
    • Foods and Beverages 37.5% of C-Store In-Store Revenues
    • C-Stores a Growing Competitor for Foodservice Dollars
    • 7-Eleven's "First, Best, and Only" Strategy
    • Fresh & Easy: British Invasion Falls Short
      • The Fresh & Easy Model
      • Tesco Also Imported its Own Infrastructure
    • Sheetz, Inc.
    • Wawa, Inc.
    • Several Supermarket Chains Also Have C-Stores
      • Kroger Is One of the Largest C-Store Operators
      • Giant Eagle Uses Supermarkets and C-Stores to Create Synergies
    • Drugstores Also Compete on the Convenience Angle
    • Drugstores Fight Back as Retail Lines Blur
    • Drugstores Testing Fresh Foods
    • Walgreens Creating "Food Oases"
      • Duane Reade Setting Food Examples
    • CVS Caremark Doubling Food Sections in Nearly Half Its Stores
    • Rite Aid Piloting Co-Branded Stores with Save-A-Lot
    • Can the Drugstore Channel Compete in Fresh Foods?
    • Drugstores Will Become the New Neighborhood Grocers
  • Alternative Channel Trends - Highlights
  • Alternative Channel Trends
    • Farmers' Market Count Increases 16% Since 2009, to Over 6,100
    • Two Types of Farmers' Markets
    • Produce by Prescription
    • Farmers' Markets Complain About Grocery Competition
    • Community Supported Agriculture Programs (CSAs)
    • Vending Machines Offer Convenience 24/7
      • Vending Homes in on Fresh Fruit and Vegetables
      • Kraft Foods Testing Interactive Vending Machines
      • Japan Testing Vending Machines with Facial Recognition
    • Online Grocery Services
      • FreshDirect an Interesting Model
    • Big Guns Testing Online Ordering Services
    • Thinking Outside the Box
      • Mobile Food Trucks
      • Pop-Up Stores
    • Other Alternative Channels Target Impulse Sales
  • Marketing and Media Trends - Highlights
  • Marketing and Media Trends
    • Shopper Marketing
      • What, Exactly Is Shopper Marketing?
      • Technology Is Changing Marketing Vehicles
    • Advertising Trends
      • Biggest Media Spender Is Walmart
        • Table Advertising Spending for Selected Top Food and Beverage Retailers, 2007-2009 (in millions of dollars)
      • Bloom's Grill-Board Uses Traditional Ad Medium in a Non-Traditional Way
      • Resurgence in Coupons
      • Digital Coupons Soaring
      • Customized Coupons Leverage Loyalty Card Data
      • Kroger the Pioneer in Personalized Coupon Offers
      • Sam's Club eValues a Perk for Plus Club Members Only
      • Safeway Just for U
      • Meijer's mPerks uses Phone Numbers, Not Cards
      • Coupon Strategies
    • Using Social Media
      • Making Use of Websites and Social Media
      • Twitter
        • Table Selected Retailers' Facebook and Twitter Fan Bases, January 7, 2011 (actual count)
      • F-Commerce Is Coming
      • The Smartphone Revolution
      • QR Codes
      • Check-in Apps
      • Harnessing the Power of Word-of-Mouth
      • In-Store Messaging Evolves with Technology
      • Direct Consumer Research
    • In-Store Merchandising Trends
      • Smartphone App Helps Shoppers Navigate Meijer Supercenters
      • Carpeted Flooring?
      • New On-Site Food Equipment
      • "Clean Floor" Policies Limit Marketers' Displays
      • Supervalu De-Cluttering In-Store Messaging
  • Addresses of Selected Industry Associations and Retailers

Abstract

Food retailers continue to face challenging economic times as the Great Recession, albeit now officially over, has changed and accelerated changes in consumer behavior and the retail marketplace. Shopping patterns have shifted as consumers have re-evaluated the price-value equation, and the lines dividing retail channels continue to blur. Growing competition, emerging and merging retail formats, price wars, the burgeoning strength of private labels, retailers as arbiters of wellness and nutrition management, SKU rationalization (or not), and experiments with Internet marketing and digital technologies are just a few of the trends that promise to reshape food retailing in the near-term future. More than ever, retailers and marketers of consumer packaged goods need to keep a close watch on macro and micro trends alike, and adjust their merchandise assortments, pricing, and marketing strategies accordingly.

The Future of Food Retailing in the U.S. offers a comprehensive examination of the overriding trends in the market, highlighting opportunities and strategies retailers and CPG marketers can use to optimize their businesses during the coming years. The report provides detailed analysis of trends in the key retail channels through which foods and beverages are sold, including Grocery (major and independent supermarkets, natural food stores, ethnic supermarkets, traditional small grocery stores, and gourmet/specialty stores), Value (supercenters, mass merchandisers, warehouse clubs, dollar stores, and limited assortment stores), Convenience (convenience stores), and Alternative (drugstores, farmers’ markets, online grocery services, vending machines, and other alternative venues). In-store merchandising and food preparation trends, category sales trends, marketing trends, and media trends including use of new social media are also covered.


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