Downloaded 25 times
![A February 2010 proprietary consumer survey by Packaged Facts determined that—not
surprisingly—with its strong value, cost, and convenience propositions, the fast-food
industry enjoys usage consumer that approaches saturation (93%). However, almost
two out of three (64%) survey respondents have bought ready-to-eat and heat-and-eat
food from a grocery store/supermarket in the past month, a testament to the high
likelihood of grocery store/supermarket use and the continuing growth of prepared foods
in that retail channel.
[Figure 3-1]
Warehouse Clubs to Push the Prepared Foods Envelope
With its strong private-label program (driven by the well-known Kirkland brand, generally
known for both high-quality and competitive prices) we believe Costco has significant
potential to grow its prepared foods sales. Its strong, high-quality private-label presence
is an ideal platform: Costco’s private-label Kirkland brand has strong brand equity and a
loyal consumer following. This private-label halo can only give consumers confidence in
similarly marketed prepared foods. Costco does not break out its prepared foods sales.
However, in a November 11, 2010 telephone interview with Packaged Facts, Costco
CFO Richard Galanti said that Costco now sells “close to 50 million rotisserie chickens”
annually.
Prepared Foods in C-Stores
As discussed in Chapter 5—”Convenience Channel Trends,” according to Convenience
Store News’ latest “Industry Report” (June 2010) foodservice now accounts for 13% of
in-store sales at convenience stores, making it the largest in-store category after
cigarettes. Many cstore operators have successfully turned their stores into popular
destinations for both hot and cold foods prepared on-site, such as deli sandwiches, flat
breads, hoagies, breakfast sandwiches, hamburgers, pizza, grilled chicken sandwiches,
salads, soups and wraps.
Yet, with competition from drugstores on the horizon, convenience stores will no longer
be the only “around the corner” pick-up-and-go choice. With respondents to Packaged
Facts’ February 2010 proprietary survey giving c-stores relatively low scores on food
enjoyment, great taste, and high quality, convenience stores may find customers going
elsewhere for food that offers better taste and quality.
A Look at the Future
Looking a bit further down the road, we believe that hybridized food retailers and
restaurants will, in fact, be the rule rather than the norm, representing a seismic shift in
both the food retailing and foodservice industries. Accordingly, Packaged Facts expects
to see both food retailing and foodservice channels continue to converge around fresh
prepared foods, working fervently to make their consumption more convenient. As a
result, the competitive lines between grocery stores, restaurants, convenience stores,
and other channels will continue to blur.](https://image.slidesharecdn.com/futurefood-110211133140-phpapp02/75/The-Future-of-Food-Retailing-in-the-U-S-3rd-Edition-2-2048.jpg)
Uploaded byMarketResearch.com
The Future of Food Retailing in the U.S., 3rd Edition
The report, 'The Future of Food Retailing in the U.S., 3rd Edition,' examines the evolving landscape of food retailing post-recession, emphasizing shifts in consumer behavior, competition, and retail formats. Key findings include significant growth in private labels, the importance of prepared foods, and the convergence of grocery stores with foodservice models. Retailers are encouraged to adapt their strategies to leverage emerging trends and optimize their operations for the changing marketplace.
More Related Content
Similar to The Future of Food Retailing in the U.S., 3rd Edition
The Future of Food Retailing in the U.S., 3rd Edition
- 1. Get more info on this report! The Future of Food Retailing in the U.S., 3rd Edition February 1, 2011 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. Market Insights: A Selection from the report Almost Two out of Three Consumers Buy Supermarket Take-Out
- 2. A February 2010proprietary consumer survey by Packaged Facts determined that—not surprisingly—with its strong value, cost, and convenience propositions, the fast-food industry enjoys usage consumer that approaches saturation (93%). However, almost two out of three (64%) survey respondents have bought ready-to-eat and heat-and-eat food from a grocery store/supermarket in the past month, a testament to the high likelihood of grocery store/supermarket use and the continuing growth of prepared foods in that retail channel. [Figure 3-1] Warehouse Clubs to Push the Prepared Foods Envelope With its strong private-label program (driven by the well-known Kirkland brand, generally known for both high-quality and competitive prices) we believe Costco has significant potential to grow its prepared foods sales. Its strong, high-quality private-label presence is an ideal platform: Costco’s private-label Kirkland brand has strong brand equity and a loyal consumer following. This private-label halo can only give consumers confidence in similarly marketed prepared foods. Costco does not break out its prepared foods sales. However, in a November 11, 2010 telephone interview with Packaged Facts, Costco CFO Richard Galanti said that Costco now sells “close to 50 million rotisserie chickens” annually. Prepared Foods in C-Stores As discussed in Chapter 5—”Convenience Channel Trends,” according to Convenience Store News’ latest “Industry Report” (June 2010) foodservice now accounts for 13% of in-store sales at convenience stores, making it the largest in-store category after cigarettes. Many cstore operators have successfully turned their stores into popular destinations for both hot and cold foods prepared on-site, such as deli sandwiches, flat breads, hoagies, breakfast sandwiches, hamburgers, pizza, grilled chicken sandwiches, salads, soups and wraps. Yet, with competition from drugstores on the horizon, convenience stores will no longer be the only “around the corner” pick-up-and-go choice. With respondents to Packaged Facts’ February 2010 proprietary survey giving c-stores relatively low scores on food enjoyment, great taste, and high quality, convenience stores may find customers going elsewhere for food that offers better taste and quality. A Look at the Future Looking a bit further down the road, we believe that hybridized food retailers and restaurants will, in fact, be the rule rather than the norm, representing a seismic shift in both the food retailing and foodservice industries. Accordingly, Packaged Facts expects to see both food retailing and foodservice channels continue to converge around fresh prepared foods, working fervently to make their consumption more convenient. As a result, the competitive lines between grocery stores, restaurants, convenience stores, and other channels will continue to blur.
- 3. Table of Contents Chapter1: Executive Summary Scope of Report Report Methodology A Broad Spectrum of Retail Channels Total Retail Food and Beverage Sales Almost $560 Billion Table 1-1: 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 Figure 1-1: Share of Food and Beverage Dollar Sales by Retail Channel, 2010 (percent) The Top 20 U.S. Food Retailers Market Outlook Table 1-2: 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
- 4. Marketing and MediaTrends Chapter 2: 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 2-1: U.S. Retail Sales of Foods and Beverages, 2006-2015 (in millions of dollars) Other Estimates in the Same Ballpark Figure 2-1: Sales of Food-at-Home and Food-Away-from-Home, 1959-2009 (in billions of dollars) 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 Figure 2-2: Share of Food and Beverage Dollar Sales by Retail Channel, 2010 (percent) Table 2-2: Competitive Analysis of Retail Food and Beverage Channels, 2010 The Competitive Landscape The Top 20 U.S. Food Retailers Table 2-3: 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 2-4: Changes in Consumer Price Indexes for Food, 2008-2011 Some Stores Walloped; Others Thrive in the New Economy
- 5. Conservative Spending Expectedto Continue Consumers Dining Out Less, Cooking More Government Regulation Food Safety Bill Passes Congress USDA to Require Nutrition Labels on Meat Chapter 3: 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 3-1: 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 3-2: U.S. Food and Beverage New Product Launches, 2001-2010 (number) SKU Rationalization (or Not) Examples of SKU Rationalization Strategies Kroger Successfully Eliminates 30% of Cereal SKUs
- 6. Walmart Cuts TooDeep 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 3-3: U.S. Retail Sales of Private-Label Foods and Beverages, 2009-2014 (in millions of dollars) Private-Label Introductions Double in 2010 Table 3-4: U.S. Private-Label Food and Beverage New Product Launches, 2006- 2010 (number) Fresh & Easy Leads in Private-Label Introductions Table 3-5: 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 Figure 3-1: Foodservice Use in Past 30 Days: By Channel, February 2010 (percent) Mean Use of Foodservice Figure 3-2: Foodservice Mean Use in Past 30 Days: By Channel, February 2010 Foodservice by Usage Occasions Figure 3-3: Foodservice Use Occasions in Past 30 Days: By Channel, February 2010
- 7. Prepared Foods inSupermarkets Figure 3-4: Supermarket Deli Prepared Foods, Share of Sales: By Food Type, 2009 (percent) 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? Illustration 3-1: TOPS “Real Meat — Real Butchers” Ad 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
- 8. Greener Stores Walmart’s Sustainability Scorecard Makes Slow Progress Sustainability = Profitability Plastic or Paper? Tesco Testing Zero-Carbon Supermarket in England Chapter 4: Grocery Channel Trends Grocery Channel Leads Food Sales Figure 4-1: Growth of Sales at Traditional Food Stores, 1999-2009 (percent) Even National Supermarket Operators are Regional Players Table 4-1: 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
- 9. Wegmans Raises theBar 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 Chapter 5: 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 Supermercado de Walmart Opens in Houston Walmart Seeks Collaborative Sourcing with Suppliers 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
- 10. Costco Looking toOpen 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 Chapter 6: 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 Illustration 6-1: 7-Eleven’s 7-Select Store-Brand Packaged Snacks 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
- 11. Walgreens Creating “FoodOases” Duane Reade Setting Food Examples Illustration 6-2: Duane Reade’s DR Delish Premium Private-Label Snacks and Beverages 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 Chapter 7: Alternative Channel Trends Farmers’ Market Count Increases 16% Since 2009, to Over 6,100 Figure 7-1: Growth in Number of Farmers’ Markets, 1994-2010 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 Chapter 8: Marketing and Media Trends Shopper Marketing
- 12. What, Exactly IsShopper Marketing? Technology Is Changing Marketing Vehicles Advertising Trends Biggest Media Spender Is Walmart Table 8-1: 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 Illustration 8-1: Bloom Grocery’s Steak-Scented Billboard 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 Illustration 8-2: Safeway’s Online Coupon Center Meijer’s mPerks uses Phone Numbers, Not Cards Coupon Strategies Using Social Media Making Use of Websites and Social Media Illustration 8-3: Whole Foods Market’s Facebook Newsletters Illustration 8-4: Safeway’s Facebook Page Blog Twitter Table 8-2: Selected Retailers’ Facebook and Twitter Fan Bases, January 7, 2011 (actual count) F-Commerce Is Coming The Smartphone Revolution QR Codes Illustration 8-5: Port Townsend Food Co-op’s On-Shelf QR Code Signage
- 13. Illustration 8-6: QRReplica Displayed by Dave’s Killer Bread Illustration 8-7: Dole/Price Chopper Promotion Utilizing QSR Code Technology Check-in Apps Illustration 8-8: CheckPoints Mobile App Featuring Tyson Any’tizers Harnessing the Power of Word-of-Mouth In-Store Messaging Evolves with Technology Direct Consumer Research Illustration 8-9: Walmart Great Value Round Table Survey/Promo Feature Illustration 8-10: Fresh & Easy Favorites Feedback Opt-in Email Program 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 Appendix: Addresses of Selected Industry Associations and Retailers Order Information Online Download - $3,995.00 Global Site License - $6,000.00 Hard Copy Mail Delivery - $4,395.00 Online Download plus 1 Hard Copy - $4,795.00 Available immediately for Online Download at http://www.marketresearch.com/product/display.asp?productid=2739666 US: 800.298.5699 UK +44.207.256.3920 Int'l: +1.240.747.3093 Fax: 240.747.3004