Traditional grocery's share of the grocery market slipped to 44% in 2016, as reported by Inmar Willard Bishop in the Food Institute's Future of Food Retailing webinar May 17. This was four percentage points below five years earlier. Meanwhile, non-traditional grocery's share increased from 37% to 40%, while convenience stores' share rose a percentage point to 16%. Specifically, sales for dollar formats rose 4.2%, while drug stores rose slightly to 1.5%.
This annual webinar focused on the evolution of the industry, shopper behavior and analytics, personalization and redefining success. Speakers Jim Hertel and Craig Rosenblum of Inmar Willard Bishop noted there is an unprecedented disruption in food retailing that is being driven by emerging formats, the digital economy, social engagement, the shrinking of the center store, food deflation and a variety of other factors.
E-commerce is still only a small part of the overall food retail market, but it is by-far the fastest growing. Limited assortment stores, supercenters and dollar stores are also seeing revenue growth, while traditional retailers and mass merchandisers are seeing significant declines. According to Inmar Willard Bishop research, non-traditional grocery only made up 2% of the food retailing channel in 1988, while traditional supermarkets made up 90%. Shifting to 2016, traditional grocery has dropped to only 44%, while non-traditional jumped to a whopping 40%. Even the convenience store channel doubled its dollar share from 8% in 1988 to 16% in 2016.
Hertel and Rosenblum also noted that retailers need to be aware of the changing consumers, which is driven by trends such as age splits, ethnicity changes, the health versus speed conundrum and paranoid shoppers. There is also a smaller separation between eating at home and eating away from home.
Another influencer is social media, which is changing shoppers' rules of engagement. Inmar Willard Bishop found 73% of consumers now use social media to make purchase decisions, and 71% are more likely to make a purchase after a social recommendation.
For more insight and analysis from this information-packed webinar, visit The Food Institute's events page to gain access to the presentation slides and a recording of the event.
Jennette has been with The Food Institute since 2013. As Marketing Director, she is responsible for promoting all Food Institute books, seminars and webinars, as well as writing and editing the Food Institute’s annual publications. Additionally, she writes for and edits the daily news update, Today in Food, and contributes to the biweekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and graduated from Rowan University in 2012 with a degree in Communication Studies.
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