How Supermarkets can Win-Back their Market Share

Willard Bishop recently published its annual The Future of Food Retailing report. As expected, the supermarket channel continued to lose market share to non-traditional formats such as mass/club, drug, and convenience stores. As illustrated below, the supermarket reigned supreme in 1998 with 90% dollar share; while non-traditional formats and convenience stores accounted for 2% and 8%, respectively. In 2013, traditional formats had lost 44% of their dollar share, which was redistributed to non-traditional formats and c-stores.

FFR Apples

Source: Willard Bishop, The Future of Food Retailing

While channel blurring continues to meld into omni-channel, it is clear that the one-size-fits-all model of retail will no longer suffice - regardless of channel structure. Innovation, which has been typically centered around food, is happening quickly and offerings are getting more specialized. Consider the following:

Rite-Aid’s Beverly Hills 90210 Store has evolved into way more than your traditional drug store. This store consists of a Fresh Café, Wine and Spirits, and a décor that looks more like a Nieman Marcus department store than a drug store.

Target Express and Walmart Express continue to evolve their concepts to meet consumer needs and eliminate the issue of having to find locations which can support only 100,000+ square foot stores. These new express stores, which are approximately 15,000 – 20,000 square feet, are designed to address the urban shopper versus the traditional suburbanite. The express stores offer grocery and grab-and-go meals/snacks, along with other traditional mass items such as clothing, electronics, and household chemicals.

Brothers Marketplace (Roche Bros.) in downtown Boston’s famed Filene’s Basement, is a 2-story, 25,000 square foot (3,000 at street level and 22,000 occupying the historic basement) supermarket that caters to young foodies and the health-oriented consumer. Brothers Marketplace is also concentrating on local and specialty brands, prepared foods, and workers whose
expertise can help shoppers become better cooks.

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