When
Ronald Reagan said “Tear Down That Wall” he was not talking about the barriers
to entry into fresh food retailing.
However just in case you missed it.
For the very first time Supermarket
News Magazine included three drugstore chains and Amazon.com in its annual
ranking of the top 75 grocery retailers in the United States and Canada.
Today,
Ready-2-Eat and Heat-N-Eat fresh prepared food (Grocerant Niche) is the key
driver of change in our fast evolving food sector according to Foodservice
Solutions® Grocerant Guru™. In fact the
new ranking also pushed the Great Atlantic & Pacific Tea Co. (A&P), the
company that invented the modern supermarket, and previously the biggest food
retailer in the country, down three spots to 35th on the list. It has been a
long hard slide for A&P, Safeway, Albertson, and others. Who will be next?
It
has now become a battle for ‘share of stomach’ as legacy food retailers
continue to capitulate market share with no end insight. Grocery stores have capitulated 2.6% of
market share from 2000 to 2013 to the UDSA Table 10 Food Away from Home as
share of food expenditures. Those sales in most cases are considered restaurant
sales. If you look at that chart from
1929 until 2013 wow there is not sustained break just a down trend line.
Supermarket
News ranked in order of sales revenue from groceries, with Walmart at No. 1
with $221.8 billion in consumables sales and Texas-based Brookshire Brothers
food and pharmacy chain last on the list, with $1.3 billion in sales. Sales
figures are based on company reports and industry estimates collected by
Supermarket News.
Supermarket
News began ranking grocery retailers about 20 years ago, drugstores weren't very significant when it
came to selling food and Amazon barely existed.
When drugstore chains CVS, Walgreens and Rite Aid were added to the
list,CVS was ranked the 11th-biggest grocery retailer, with sales of $20.1
billion, putting it ahead of Target, Whole Foods, Trader Joe's and dozens of
traditional supermarket chains. Walgreens ranked 23rd, with sales of $10.7
billion, and Rite Aid ranked 44th, with grocery sales of $3.7 billion, those
are good numbers.
The
landscape shocker might have been Amazon.com, which has increased its offerings
of groceries in recent years, was ranked 62nd, with sales of $1.6 billion. What
is next clearly the Dollar store sector will be the next be challenge for
legacy grocery stores. The landscape is changing are you ready? Who will be the
next A&P more important who will be the next number one to replace
Walmart? Selling fresh meals? Amazon, Plated, Hello Fresh or Dollar
Tree?
Still the Big Three
No.
1 — Walmart — grocery sales of $221.8 billion
No.
2 — Kroger Co. — grocery sales of $108.8 billion
No.
3 — Costco — grocery sales of $91.5 billion
New on the list:
No.
11 — CVS — grocery sales of $20.1 billion
No. 23 — Walgreens — grocery sales of $10.7 billion
No. 44 — Rite Aid — grocery sales of $3.7 billion
No. 62 — Amazon.com — grocery sales of $1.6 billion
No. 70 — H Mart, a Lyndhurst-based Korean market — grocery sales
of $1.5 billion
www.FoodserviceSolutions.us since 1991 is a global retail food consultancy based in Tacoma, WA has
been the global leader in the Grocerant Niche, Mix and Match Meal Component
Bundling Ideations. Follow us at: http://www.linkedin.com/in/grocerant, twitter.com/grocerant
or Facebook Steven Johnson Contact: Steve@FoodserviceSolutions.us
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