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.
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.
For the rest of the story, and to register for future editions of Competitive Edge, click here.