The traditional grocery channel still commands the largest share of sales generated from grocery and consumable products, according to Inmar Analytics 2019 Future of Food Retailing Report.
Although in-store shopping is still the most popular format, its share is shrinking as traditional grocery continues to lose share to non-traditional grocery channels. Since 1988, it has lost over half of its market share, going down to 44% from 90%.
"Established CPG brands and grocery retailers need to embrace new strategies for driving growth in a marketplace where sales volume and profit are suffering continuous contraction, with an increased focus on innovation," said Jim Hertel, SVP at Inmar Analytics.
E-commerce sales for food and consumables totaled $58 billion in 2018, an increase of 21.7% over 2017. Additionally, the volume of e-commerce sales at traditional retails continued to rise. Amazon dominated the space for year-over-year food and consumables sales, increasing 23.5% in 2018, totaling $21.1 billion for the year. (Find more insights from the report in our annual webinar)
To gain a bigger piece of online sales, Walmart will expand its Delivery Unlimited grocery membership to 1,400 stores in the fall.
"We've been investing in our online grocery business by quickly expanding our Grocery Pickup and Delivery services. Delivery Unlimited is the next step in that journey," said Tom Ward, SVP, digital operations, Walmart U.S.
Grocery Delivery builds on Walmart's Grocery Pickup service allowing customers to order groceries online and pick them up in stores without leaving their vehicle. Delivery Unlimited will be available in more than 1,600 stores and more than 50% of the country by the end of 2019.
Sales in the non-traditional grocery channel increased 1.9% to $500.6 billion. The top-performing formats in this channel for 2018 were dollar store and wholesale club, with sales gains of 5.7% and 3.3%, respectively. Drug stores experienced a significant sales decline of 6.0% in food and consumables.
Convenience stores experienced a sales gain of 2.2% to $201.7 billion despite a 1.1% decrease in the number of stores. Market share remained flat at 16.1%, and food accounted for about two-thirds of convenience store sales.
However, in the traditional grocery channel, sales fell 1.1% to $547.6 billion in 2018. Market share declined to 43.8% of overall grocery sales, representing a 1.7% decrease from 2017.
In-store shopping is a struggle for 31% of America's caregivers, according to a survey from AARP. Lack of accommodation was reported as a top problem with shopping in-store, leading many opting to shop online, even though they prefer the in-store experience.
"Retailers can score big with caregivers if they make it easier for them to bring their loved ones along when they shop," said Nancy LeaMond, AARP EVP.
Dedicated parking spots for caregivers; ample, comfortable reserved seating for loved ones; and wider aisles that easily accommodate wheelchairs are important changes retailers should consider, according to the survey.
Victoria writes for the weekly Food Institute Report and the daily news update, Today in Food. Victoria graduated from Montclair State University with a B.A in Journalism and has a background in Nutrition and Food Science. She can be reached through her email at Victoria.firstname.lastname@example.org.
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