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
1. Food
2. Tobacco
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
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