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Larger retailers get creative to compete for market share
AS NON-TRADITIONAL GROCERY RETAILERS SEE MORE COMPETITION FROM dollar store formats and wholesale club stores, mass merchandisers and supercenters are enlisting new ways to grow their consumer bases.
According to Barrington, Ill.-based Willard Bishop's June 2011 report "The Future of Food Retailing," supercenter sales grew 6.3 percent in 2010, with store counts increasing 4.1 percent and market share up 0.3 percent to 17 percent. During that same time period, mass merchandise sales increased 6.1 percent and market share increased from 0.1 percent to 4.4 percent.
In comparison, wholesale club store sales increased 8.2 percent, making up 8.3 percent of the retail food industry, and dollar store sales increased 8.8 percent with a market share of 2.1 percent, Willard Bishop's report states.
The market research company predicts supercenters will continue sales growth at a rate of 5.9 percent a year going into 2015, increasing market share to 20.3 percent within that time. However, annual sales at mass merchandise formats are predicted to decrease 7 percent a year into 2015, resulting in a 2.7 percent market share, as more conventional mass merchandise stores are converted into supercenters, the report says.
The notion of value in retail channels has helped create more competition among the retailers in the non-traditional grocery segment.
"In the past, mass [merchandise stores] and super[centers] have done very well competing on everyday low price strategy, and during the course of the downturn and the recession we've really seen retailers across channels embracing everyday low price strategy, so it is not really the distinctive competitancy that it used to be for mass and supercenter channels," says Susan Viamari, editor of Times & Trends magazine for Chicago-based SymphonyIRI Group. "In fact, consumers aren't always necessarily looking for the lowest price, but the best value."
Viamari adds that consumers are looking at a return on investment, assortment and product attributes, which can be applied to the beverage industry.
"Beverages specifically are performing the best within the grocery channel and the club channel," she says....