Can Legacy Grocery Stores Survive

With Alibaba, Amazon, Aldi, and Lidl all focused on opening new units and new avenues of fresh food distribution. Foodservice Solutions® Grocerant Guru® wonders have legacy grocery stores done the same thing so long, done it the same way is there any way they can adapt to the new evolving fresh food formats focused on grocerant niche Ready-2-Eat and Heat-N-Eat fresh food in time to save themselves?

What other choice do they have even a FMI thinks that the “grocery business industry truly is at the tipping point of great change. More than driverless vehicles or delivery drones, the digitally engaged food shopper will fundamentally transform how food is bought and sold.” Wow  the team at Foodservice Solutions® has been saying that since 1991. 

Nielsen and the Food Marketing Institute (FMI) revealed initial findings from its Digitally Engaged Food Shopper study. Quite frankly the findings were distressful if you’re a legacy grocer.  Here they are:

1.       Multi-channel shopping: More shoppers are buying more of their groceries across channels.

2.       Digital experimentation: Grocery retailers and manufacturers are meaningfully experimenting with business models and technologies to find their way online. However, the road to success has not been paved.

3.       Grocery saturation: Grocery shopping will reach digital maturity and saturation faster than other industries, such as publishing or banking.

4.       Center store migration: Center store categories are already migrating online, and we expect this migration to continue.

5.       Young and digital: Younger, newer and more engaged digital shoppers adopt grocery-related digital technologies more quickly and will hasten the expansion of digital grocery shopping further.

Regular readers of this blog know companies the ilk of IKEA, Pinkies Liquor stores, and CostCo are all selling both Ready-2-Eat and Heat-N-Eat grocerant niche food will little sign of regret. Alibaba, and Amazon rule the digital world as legacy stores fumble with click & collect most spending more on technology than they receive in food sales. 

Dollar stores have defined the grocery sector as no longer relevant, resulting in 50% fewer legacy grocery stores today than 15 years ago.  There is no grocery saturation problem, grocery stores have a Dollar store problem. 

Gen Z and Millennials don’t find fresh food discovery at a legacy grocery store they find a maze designed to consume time exactly the opposite of their goals.  Maybe it’s time that legacy grocery stores quite thinking about incremental change and get some Outside eyes that can help them drive top line sales and bottom line profits. 

www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us