Sunday, April 7, 2013

Grocery Stores Don’t Get Sad Get Innovative

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 Johnson, or

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