Regular readers of Foodservice Solutions® Blog are familiar with the term cherry picking; well once again the Dollar store sector is expanding its focus on food, entering fresh food and once again garnering customers from legacy grocery stores.
The next big thing in foodservice retail reported lately may just be as “analysts and experts are beginning to wonder if “big grocery” runs the risk of being the “big loser” in the equation.” In a recent report in Forbes, “the top four chains saw total annual sales grow from $28 billion to an estimated $42 billion. That adds up to a compounded annual growth rate of 8.5 percent.” That makes for some hard times for legacy grocery stores according to our own Grocerant Guru®.
The Big problem is the number one growth item driving growth areas for dollar stores are grocery items
3. Health and beauty
4. Household paper and cleaning products.
The report in Forbes went on to say that “The top four chains have been able to increased their combined annual grocery category sales by a little over $10 billion from 2010 through 2015, from $18.3 billion to around $28.6 billion.” Even Donald Trump would say that’s HUGE!
Combine that news with news that Amazon Fresh is building a platform to garner Millennials, Baby Boomers and everyone else by selling meals, meal kits, and fresh food. Pantry busting is expanding and legacy grocery retailers had better migrate to a grocerant niche platform themselves or simply become the next A&P.
While Dollar Stores, Amazon today are not segment killers we ask what about adding restaurants to the mix? There are 24 restaurants today for every grocery store and they are simply put pantry busters as well. Remember that low cost grocery upstart Aldi will have 2,000 units by the end of 2017 and low cost upstart Lidl has yet to open a unit and is planning to invest $ 4 Billion in the United States over the next five years.
Dollar stores continue to add food increasingly that food is grocerant niche fresh Ready-2-Eat or Heat-N-Eat prepared food that is garnering new customers daily. Foodservice Solutions® Grocerant Guru® says that void incremental adopting of the Grocerant Niche legacy grocery retailers will be a tough environment to work in.
Since 1991 retail food consultancy Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Foodservice Solutions® or for a Grocerant Scorecard visit http://www.linkedin.com/in/grocerant, www.GrocerantGuru.com Email: Steve@FoodserviceSoltuions.us