The Evolving food consumer: Close-Up Look at Food Retailing Today

The grocerant niche is changing the face of retail food sales. As it turns out, a recent analysis / case study of the Philadelphia grocery marketplace will tell us a lot about the changing state of food marketing.[1]  Regular readers of this blog will not be surprised at the findings which I believe reflect the success of the expanding fresh prepared ready-2-eat and heat-N-eat grocerant niche nationally.

The #1 chain in terms of market share is regional brand Wakefern’s ShopRite banner.

But more telling: the #4 “grocery” food retailer is Convenience-store chain Wawa.

That’s right, a convenience store that sells quality ready-2-eat fresh prepared food non-traditional food retailers are expanding at an ever faster rate than ever before.  This July Wawa will open stores in the Orlando, FL Market.

These 20 chains account for 92.1% of the total grocery market. And over $3.8bn of the $13.7bn or 28% of the spend on food in Philly was racked up by “non-traditional” retailers like CVS, Walgreens and Rite-Aid, not to mention 7-Eleven. The latter’s rather poor numbers explode the myth that 7-Eleven dominates the c-store category, which is mostly made up of small chains and single operators.

And if mass merchants Target, K-Mart and Wal-Mart, and club store BJ’s are excluded from the totals, and only traditional grocery stores are factored in ($7.66bn), then the percentage of sales by non-traditional retailers rises to almost half (49%). Clearly the food marketplace is VERY different than what it was just a few years ago, and those changes are having real impact on the way food is sold in the U.S. But just when you think the traditional grocery store in on the way out, North Carolina-based Food Lion (part of Belgium’s Delhaize Group) has announced its intention to tackle the Philly market in a big way.

3 of the top ten are non-traditional food retailers.

Store Name	Number of Stores	Sales ($MM)	Share (%)
1. ShopRite	43	1,700	11.42
2. Acme	69	1,570	10.56[2]
3. Giant Food Stores	47	1,530	10.29[3]
4. Wawa	280	1,440	9.65
5. Rite-Aid	252	884.1	5.94[4]
6. A&P/Superfresh/Pathmark	40	850.8	5.72[5]
7. Wal-Mart	37 SuperCenters	831.1	5.59
8. CVS	187	817	5.49
9. Genuardi’s	28	733.7	4.93[6]
10. Target	29	534.4	3.59
11. Walgreens	90	480.9	3.23
12. BJ’s Wholesale Club	12	413.9	2.78
13. Wegmans	6	371	2.5[7]
14. Save-A-Lot	34	258	1.74
15. Sam’s Club	7	238.2	1.6
16. Thriftway/Shop’N’Bag	21	230.5	1.55
17. Redner’s Market	10	222.7	1.5
18. K-Mart	29	210.9	1.42[8]
19. 7-Eleven	179	201.3	1.35
20. Whole Foods	8	191.6	1.29

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Chain Drug stores Rite-Aid and CVS rank in the top 10 of food retailers in Philadelphia. That makes 3 companies in the top ten that are non-grocery stores.  Walgreens is selling fresh prepared food in NYC, Chicago, and San Francisco.  Coast to coast food retailing is evolving.  The grocerant niche is filled with  new points of distribution, new fresh food offerings, and smaller more convenient locations all driving top line sales and bottom line profits.

[1] Source: Philadelphia Business Journal.

[2] Parent company Eden Prairie, Minn.-based Supervalu Inc. shuttered seven stores in 2011.

[3] Owned by Dutch retail conglomerate Ahold, Giant is projected to overtake Acme in 2012 as the #2 grocery chain.

[4] The Camp Hill, PA company has a pilot program with Save-A-Lot in North Carolina to co-brand 10 stores carrying a full line of groceries and drug products.

[5] Parent company Great Atlantic & Pacific Tea Co. has been closing stores since filing for bankruptcy protection in December, 2010, shuttering seven in the greater Philadelphia market, while opening only one Superfresh.

[6] Parent company Safeway will sell 16 stores to Giant Foods, close three and seek buyers for the remaining eight.

[7] The Rochester, N.Y.-based company will open two new stores, and at 140,000 ft.² are 2x the size of a conventional supermarket.

[8] K-Mart closed four stores in Philadelphia in 2011.

Note: Reprinted with permission of Broad Street Licensing with permission and edits. Here is the link to the original http://www.bslg.com/news/2012/01/philadelphia-story

Outside eyes can deliver top line sales and bottom line profits.  Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.