Posted: Apr 17, 2012
TEMPE, AZ (April 17, 2012): Food retailers and manufacturers are faced with numerous challenges and opportunities this year and beyond according to Food Institute President, Brian Todd, who spoke on April 17 at the National Frozen & Refrigerated Foods Executive Conference in Tempe, AZ. “Faced with more and more places for consumers to purchase food, traditional supermarkets have to compete more aggressively for budget-conscious consumers. At the same time, however, food marketers can now approach more diverse types of retailers to sell their products to,” commented Mr. Todd.
One retail format that will continue to sell more food is dollar stores, which will grow rapidly over the next 5-8 years and stock up their food aisles and freezer cases as well. Some sources project there will be 33,000 dollar stores operating by 2020.
Consumers get a bit of a break on retail food prices this year compared to last, as they are projected to rise 2.5% to 3.5% in 2012, well below the 4.8% rate increase experienced in 2011. Unfortunately several of the categories that drove prices sharply higher in 2011 will continue to rise above the average in 2012 noted Mr. Todd. Beef prices, which jumped 10.2% in 2011 will likely increase over 5% or more this year due to limited supplies and higher feed costs. What impact, if any, the commotion over finely textured beef has on prices yet to be seen, but some analysts project that could contribute to further increases in beef prices.
And while the population of the U.S. is still increasing, and is the only developed nation to be doing so, Mr. Todd notes that growth is slowing from prior years. “In 2011, the U.S. population grew by just 0.74% according to the Census Bureau, down from 0.84% in 2010 and well under the 1% annual growth that was the norm in the 1990s. The current population of 311.6 million is actually 1.6 million less than the Census has projected a few years ago. And that means that retailers will have to work harder to increase sales that had been positively impacted by an ever-growing population.
It will be an interesting and exciting year for the food industry and The Food Institute, based in Upper Saddle River, NJ, will continue to keep members informed in an unbiased, timely and accurate manner, as it has since 1928.
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