Wednesday, September 4, 2013

Safeway Sold Canadian Stores Will They Sell Stores in the US as Well?

Food consumer migration has been the leading undercurrent of change in all sectors retail of foodservice.  New non-traditional retailers of fresh prepared food have seen market share gains in Canada, the United States, and around the world.  The grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food continues to garner sales and market share from legacy retailers waiting for the “good old days”. When Safeway sold all of their Stores in Canada we knew sales had been slipping but not by as much as we know now.  

In a new 52 page report released by the U.S. Department of Agriculture the stunning rapid rate of market share decline by supermarkets in Canada to “other retail food outlets” tells the story.  According to the U.S. Department of Agriculture report, the food market share for grocery stores/supermarkets dropped from 67% in 2009 to a projected 63.5% in 2011 alone.  Canadians did not eat less they are eating at and from other non-traditional fresh food retailers aka grocerant retailers. Think it won’t happen to you? 

One non-traditional fresh food sector filling the gap is drug stores.  Yes chain drug stores food sales increased in Canada from 5.9% to 7.2% from 2009 to 2011.  We know now that Walgreens is focusing on fresh prepared meals and meal component options in the U.S. for 2014.  Who is after your dinner customers?  Restaurants, grocery stores convenience stores must reposition or risk losing additional market share to the drug store sector. New non-traditional fresh food retailers are popping up all the time extending meal component options for consumers.  Do you have consumer relevant day-part differentiation drivers? 

Safeway continues to suffer from Footprint Malaise.  Leveraging category management techniques of the 80’s, 90’s and 2000’s while developing “lifestyle stores” expanding store footprints when adding new popular fresh prepared food, was a mistake. All the while Dollar stores continued to cherry pick the center of the grocery store leaving a void in customer relevance for Safeway.

Consistently, repeatedly consumer studies have found that shoppers do not like the time it take to shop at a legacy grocery store. They are too large and it simply takes too much time.  Yet, the driving legacy metric of basket size drove larger and larger stores.  Footprint Malaise may be the trap that forces Safeway to sell off some additional divisions, regions or brands through-out the United States.
Consumers today like the 30,000 SQFT Whole Foods selling 23.5% fresh prepared Ready-2-Eat and Heat-N-Eat food.  Success does leave clues and building larger and larger stores with food you have to cook from scratch is not one of them. A store with fresh prepared Ready-2-Eat and Heat-N-Eat meal components that can be bundled customized, and personalized family meal is a clue to bank on.
Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization contact us via Email us at: or visit Johnson, or

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