Between ever-bigger discount stores, rapidly expanding warehouse clubs and proliferating convenience stores, American supermarkets are used to fighting for every customer. But a new report from Nielsen Perishables Group shows that grocery chains are now even losing their edge in fresh foods, including produce, meats, deli and bakery. By 2016, the report predicts that grocery’s share of those foods will fall 2 percentage points to 64%.Warehouse clubs' share will rise 2 points to 12%, and mass/supercenters will see a 1-point rise to 15%.
In the U.S., sales of these fresh foods typically generate 29% of total store sales, with meat accounting for 29% of those sales, produce 32%, deli 16%, bakery, 7%, and seafood 5%. (In the Asia-Pacific region, they account for nearly 60% of sales.)
The report, based on responses from more than 87,000 people around the world, highlights other strong cultural differences as well. The U.S. consumer shops far less frequently for fresh food -- about 1.4 times per week, compared to 2.5 times the global average. But in the Asia-Pacific region, people shop 3.9 times a week for produce; Latin Americans shop 4.3 times weekly for fresh bakery items.
And while almost all consumers prize the same qualities in these fresh foods, their priorities can be very different. “While good value for the money and convenience are most important store choice factors among Europeans and North Americans,” it says, “freshness is paramount among Asia-Pacific, Latin America and Middle East/Africa.”
As part of the fight for share, retailers are now having to regard fresh foods in much the same way they do branded ones. “Suppliers and retailers are slowly but surely transitioning to the consumer-packaged goods style of category management based on the knowledge of both consumer and performance data,” the report says, “to better understand how various consumer groups purchase fresh foods differently, at which stores, and at what price points.”