Expected Compound Annual Sales Growth Rate vs. Inflation: 2005-2010
(Grocery & Consumables) |
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Source: Willard Bishop, 2006,
USDA Economic Research Service |
"This is a conservative estimate given that rising energy prices could push the inflation rate even higher," said Jim Hertel, SVP of Willard Bishop.
CHICAGO, IL - During "The Future of Food Retailing" Webinar sponsored by The Food Institute, Willard Bishop revealed that growth rates for six retail formats are not expected to keep pace with inflation. The six types of formats include four grocery retail formats, convenience stores that sell gas, and military outlets. While it's not anticipated that mass retailers will experience any real growth, Fresh Format stores, Limited-Assortment stores, Supercenters, and Dollar stores will post the greatest gains vs. inflation by 2010.Willard
Bishop's annual "Future of Food Retailing Report" reveals even further market share erosion for traditional grocery formats. Total traditional grocery market share for 2005 was 50.4%, while the market share for non-traditional grocery outlets reached 33.4%. Convenience store market share for 2005 was 16.2%. By 2010, traditional grocery share is projected to decline to 44.1%, while non-traditional grocery share is projected to increase to 40.5%. And, while convenience store sales will continue to rise, this format is not expected to keep pace with the growth of other retail formats and therefore is projected to have a 15.4% market share by 2010.
Both Jim Hertel and Bill Bishop, Founder of Willard Bishop, underscored the need for immediate action by manufacturers and retailers. "Manufacturers need to embrace the changes that are taking place in food retailing today in order to succeed over the long term," observed Mr. Hertel. "Even if new and emerging formats aren't ‘right' for your products, these are the types of stores where Americans are increasingly purchasing their food and consumables."
Mr. Bishop cautioned, "The key takeaway for retailers is that there's real risk in falling behind in efforts to satisfy shopper needs. Sales are shifting more rapidly than ever before among stores, and the growth is going to the most innovative retailers."
- Traditional Grocery Outlets include: Conventional, Superstore, Food/Drug Combo, Fresh, Limited Assortment, Super Warehouse, Small Grocery, Convenience selling gas, Convenience not selling gas.
- Non-Traditional Grocery Outlets include: Club, Supercenters, Mass, Dollar, Drug, and Military.
To get a copy of "The Future of Food Retailing" visit: www.willardbishop.com, click on "Press," and then click on "The Future of Food Retailing."
Consumers Put Brakes On Food Spending Last Year
ELMWOOD PARK, NJ - (February 2009) - Americans spent an estimated $1.38 trillion on food last year according to the Bureau of Economic Analysis' most recent quarterly report- that's 2.47% less than food spending had been trending in the third quarter of 2008 and the largest quarterly adjustment since the government began tracking such data in 1947 despite soaring food price inflation. "It is safe to say the U.S. shopper reacted to the downturn in the economy more quickly than at any time in recent history and more vociferously than at anytime since immediately World War II when the government began tracking this data," commented Brian Todd, President of The Food Institute.
The behavior of the U.S. consumer changed significantly in the last half of 2008 as prices for food rose at the highest level in almost two decades. Following two years of accelerated food price inflation, what is the outlook for retail food prices in 2009?
As the U.S. and global economies have fallen into a recession and commodity and energy prices have fallen 30% to 60% over the past few months, the food industry faces lower costs, but greater uncertainty. Both the depth and breadth of the current recession will have an impact on the food sector and ultimately affect the prices charged by retailers and paid by consumers.
