Traditional Grocers Lose Share; Fresh Formats Gain

Willard Bishop has just released its annual rankings of grocery channels, showing that the friendly neighborhood supermarket is still losing the fight to supercenters. But within the traditional category, it reports strong growth among fresh-format stores, including Fresh Market and Whole Foods, as well as steady gains among limited-assortment chains, led by Aldi.

Traditional supermarkets continue to be America’s favorite place to shop, with a 39.1% share of market, or $444.2 billion in sales in 2013. (That’s a gain of 0.4%.) But 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.

The Barrington, Ill.-based consulting group expects those shifts to continue through 2018, with traditional channels continuing to give up ground to nontraditional ones, especially supercenters. By 2018, it predicts traditional supermarkets will claim just 36.2% of sales, with the share of supercenters alone rising to 19.4%. In the current rankings, supercenters, such as Walmart, are the second-largest channel, and saw sales grow 4% last year to $200.3 billion, giving them a 17.6% share. Sales at wholesale clubs, including Costco, added 2.3% to $98.5 billion; drug store sales grew by 1.4% to $61.3 billion, and food and consumables purchased at dollar stores jumped 8.9% to $28.7 billion.

Within the traditional grocery category, sales at fresh-format stores are still small, and now account for 1.2% of the market. But it is 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.

Ecommerce, 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 the leader in this category, but Willard Bishop reports that Ahold, Kroger and Shop-Rite are all stepping up their e-game. The report forecasts an annual growth rate of 9.5%.

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1 comment about "Traditional Grocers Lose Share; Fresh Formats Gain".
  1. Steven Johnson from Foodservice Solutions , June 26, 2014 at 5:41 p.m.
    Consumers are migrating to Ready-2-Eat and Heat-N-Eat fresh prepared Grocerant Niche food in record numbers. What is missing from this article is that new non-traditional points of fresh food distribution are opening up monthly. Consumers are now shopping for fresh prepared food from Drug Stores, Liquor Stores, C-stores and ordering 1 million meals a month in the U.S. from companies selling meal kits (fresh prepared food). The consumer is migrating faster than many legacy grocery stores are. Why?