Supermarket Slide Sparks Opportunities for Other Channels: Study

NEW YORK -- Major demographic, lifestyle, and technological changes are creating a fertile environment for the re-invention of the food retail space, according to "The Future of Food Retailing," a new report from market research publisher Packaged Facts.

Supermarkets continue to see their share of the market fall into the hands of warehouse clubs, natural food chains, convenience stores, and even restaurants, the study found, as traditional food retailers' share of groceries and consumables has plunged from 73 percent in 1998 to an estimated 51 percent in 2005. At the same time, general merchandise-focused retailers share of the grocery business has grown from 16 percent in 1998 to 33 percent today.

"Supermarkets are being beaten at their own game by other food retail outlets that are doing a better job of continuously innovating, technologically advancing, and cautiously up-scaling food choices -- steps that are better servicing today's value-driven, gourmet-seeking consumers," said Don Montuori, publisher of Packaged Facts. "Many supermarkets will either suffer a 'slow death by stagnation,' or will self-revolutionize to meet today's consumer expectations."

Supermarkets have not been completely remiss in responding to retail and consumer pressures, the study added. Many have added in-store eateries, well-promoted organic and private label choices, and "smart carts," evidence that the future of food retailing is already happening. Lifestyle stores are taking off like wildfire, and well over 50 percent of retailers have invested in leading-edge technology systems, such as biometrics and self-checkout to quicken the shopping experience.

Analyzing the trends in flux within four retail channels -- traditional grocery, value, convenience, and alternative -- The Future of Food Retailing examines the technological advances that are changing the way consumers shop, the in-store choices changing the way consumers buy, and the retail environment revolutionizing the overall shopping experience.
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