CHICAGO -- Consumers used to buy all of their groceries at one location. This is no longer the case. Consumers are now splitting their grocery shopping across multiple channels--as many as five. As a result, and to the benefit of the convenience store channel, traditional supermarkets are losing market share, according to a Jones Lang LaSalle report.
By 2018, traditional supermarkets' share of grocery dollars will have shrunk to a little more than 37%, the report said. Consumers are spending more of their time and dollars in fresh format (Whole Foods and others) and limited-assortment stores (Trader Joe's, Aldi and others), supercenters and on e-commerce.
Fresh-format stores will see the most aggressive gains via sales growth, said JLL. (This is not surprising, it said, given that 75% of consumers surveyed prioritize fresh produce as a major drive of where they shop. And millennials and boomers are focusing more on healthy eating choices and creatively prepared meals.
Convenience stores and dollar stores top the list of the channels planning the highest nominal number of new stores (approximately 11,200 and 7,850, respectively, according to Willard Bishop), continuing a trend of the past few years, JLL said. As consolidation and closings continue, traditional supermarkets will see a net reduction in store counts.
Convenience stores sales will grow 12.7% through 2018, according to the report, citing data from Willard Bishop, and store count will increase by 7.1%. Dollar store sales will grow 31.2%% through 2018, and store count will increase by 28.9%.
Click here to view the full JLL report.
Experts say the supermarket industry is in the early stages of a massive shakeup, with rivals coming from all sides to siphon away customers, reported The Washington Post, citing JLL's data. Players such as Whole Foods Market and Fresh Market are wooing customers seeking natural, organic foods. Wal-Mart and Target are using their huge store footprints to offer a vast assortment of items, and they are joining dollar stores in going after a price-conscious grocery shopper. Still more competition is coming from drug stores and convenience stores.
Click here to view the full Post report.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.