Food Stamps usage is at an all-time high and yet traditional grocery stores
nationwide have lost 15% of their market share in the past 10 years. It’s hard
to believe the grocery industry receives a 79 Billion dollar government subsidy
from the SNAP program and is losing market share. Clearly the Grocery industry is out of step
with consumers, competitors, and contemporized relevance.
With a huge government subsidy it is clear that the grocery industry has
not worked very hard to differentiate themselves from what they were in 1980’s,
1990’s, or 2000’s. Regular readers of
this blog know we have documented the evolving shopping habits of consumers
since 1991. Consumers are dynamic not static, today consumers prefer
ready-2-eat and heat-n-eat fresh prepared food.
The simple fact that the United State Census reports 50% of Americans
over the age of 18 are single should be a clue that frequency trumps basket
size in the Grocery sector. But try to tell that to a grocer.
The
undercurrents of the evolving face of retail food competition in Florida provide
another clue to food retail success and growth. The companies garnering share
of stomach are doing so within in the ready-2-eat and heat-N-eat fresh prepared
food grocerant niche.
Two years
ago Wawa the fourth largest food retailer in the Delaware Valley committed to
spending 600+ million dollars to develop the Florida Market. Today, Thorntons,
Racetrac and 7 Eleven are all expanding
in Florida as well, all with a focus on fresh prepared ready-2-eat and
heat-N-eat food. Walgreens, Rite Aid are expanding fresh food offerings as are Dollar
stores. Competition for share of stomach is heating up. The current focused is on Florida while
setting the stage for the rest of the United States.
In the
United States three plus Dollar stores open per day. All Dollar stores are cherry picking the
center of legacy grocery store CPG
products. Differentiation does not mean different it means familiar. Grocery
store innovation need not be different but it must be the ilk successful food
retailers today.
Trader Joe’s which sells 95%+ private label also has the
highest sales per square foot in the United Sates of all retail food
companies. Aldi which like Trader Joe’s
is near 95% private label is finding success globally and expanding in the US
and looking strongly the Florida market. The lack of growth by store brands
threatens legacy grocery stores models that rely on slotting fees for legacy
brands. With Walmart’s continued success
the viability of slotting programs are in question. Must we then question of viability
of the grocery sector?
Today
consumers prefer to assemble meals rather than cook from scratch. Legacy
grocery retailers have a built in advantage in expanding, capturing and
cultivating long term customers within the ready-2-eat and heat-N-eat Grocerant
Niche. Leveraging and understanding the
complexities and universal commonalities of success within the ready-2-eat and
heat-N-eat fresh food niche is what Foodservice Solutions does best. Is it time
your company reached out to Foodservice Solutions® or focused on the Grocerant
niche?
Invite Foodservice
Solutions® to complete a Migration
Marketing Assessment or a Grocerant Program Assessment. For brand, product placement, menu
positioning assistance simply call Foodservice Solutions® today at 253-759-7869. 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
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