Tuesday, July 1, 2014

Are Slotting Fees Hurting Publix, Safeway and Kroger?

With SNAP participation continuing to grow are legacy grocery stores becoming even more dependent on slotting fees?  New non-traditional fresh food retailers are driving top line growth with customer relevance while legacy retailers focus on SNAP and Slotting fees. 

When Willard Bishop released its annual rankings of grocery channels, showing that the friendly neighborhood supermarket are still losing market share to supercenters.  We began to wonder within the traditional category, what was working?

Bishop reported “strong growth among fresh-format stores, including Fresh Market and Whole Foods, as well as steady gains among limited-assortment chains, led by Aldi”  Today  we know the customer of yesterday is more like yesterday’s business model.

In other words is if your grocery store is dependent on SNAP and Slotting fee’s the rate of customer decline will increase in 2015 according to Foodservice Solutions® Grocerant Guru™.

“Sales in nontraditional channels, a broad umbrella that includes supercenters, clubs, drug and dollar stores, increased their total share to 39%, a 3.1% to $442.1 billion in just one year the” Bishop report found. Notably food and consumables purchased at dollar stores jumped 8.9% to $28.7 billion. So where is the consumer migrating to? Let’s take a look.

Sales at fresh-format stores are the fastest-growing category by far, with the report forecasting an annual growth rate of 12.1% through 2018. And limited-assortment sales now claim 2.7%, and are expected to grow by 5.9% each year.

E-commerce, a small but closely watched category, eyed as one of the industry’s best potential growth avenues, increased 13.7% to $21.1 billion. Amazon is not the only E-tailer attempting to disrupt the  food shopping status quo. Here are five examples others working to change the grocery game forever all targeting legacy grocery stores dependent on SNAP and Slotting Fees or yesterday’s business model.  Each is focusing on tomorrow’s customers today testing, developing and implementing new business models. They are:
www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche 253-759-7869

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