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There's good news and bad news for photofinishing departments in Canadian grocery stores. The good news is that the grocery segment has captured some of the market from specialty camera/photo outlets. According to ISL International Surveys Ltd.'s Photo-Track study, grocery stores' share of the market for developing color print films reached 12% in 1994--a 2% gain over the previous year. In contrast, specialty stores' market share dropped three points to 40%.
The bad news is that this doesn't necessarily mean more dollars for grocery stores. In fact, Photo Track reports that the price of developing a roll of color print film has steadily eroded over the last few years. In 1991, 15% of 24 exposure films were processed for less than $7, while in 1994, 34% cost less than $7. During the first half of 1995, 17% of all films were developed for less than $5.
It's getting ridiculous," says Tim Chislett, category manager for photofinishing at Sobeys Inc. based in Stellarton, N.S. "Price points are going down while equipment costs are going up. In Halifax we've got two other labs competing with one of our stores, a Price Club half-a-mile down the road and a Superstore nearby. All of us have Fuji labs and we're all dropping our prices to compete with each other. I don't know how far it can go--we all know what each other is paying."
That kind of competition within the photofinishing segment, which makes up more than one-third of all photo sales, has dragged down dollar sales for the entire category. The Photo Marketing Association's Industry Trends Report shows that overall photo industry sales in Canada fell nearly 3% from 1992 to 1993 to a total of $876 million. In the U.S. last year, the photofinishing segment dropped 1.5% in dollar volume while film grew 3% and single-use cameras jumped 39%. American mass merchandisers and drugstores made gains in market share for photofinishing while food stores' share slipped, according to the PMA, which is based in Michigan.
Canadian grocery stores, however, are doing better against competition from mass merchandisers and drugstores. "Unlike the U.S. grocery industry, which is more regionalized, we have some large players that have tremendous impact across Canada," says Ron Grigg, trade sales manager, Kodak...