CHICAGO -- Growth rates for six retail formats, including convenience stores without gasoline, are not expected to keep pace with inflation during the remainder of this decade, according to a study by the Willard Bishop consultancy.
During The Future of Food Retailing Webinar sponsored by The Food Institute, Willard Bishop consultants said they anticipate an inflation compound annual rate of 2.6% through the end of the decade, while c-stores with gasoline will annual sales growth rates of 3.4% and c-stores without gas will only see growth of 1.6%.[image-nocss]
While it's not anticipated that mass retailers will experience any real growth, fresh-format stores, limited-assortment stores, supercenters and dollar stores will post the greatest gains vs. inflation by 2010, according to the report. This is a conservative estimate given that rising energy prices could push the inflation rate even higher, said Jim Hertel, senior vice president of Willard Bishop.
Also presented during the Webinar, Willard Bishop's annual Future of Food Retailing Report reveals even further market-share erosion for traditional grocery formats.
Total traditional grocery market share for 2005 was 50.4%, while the market share for non-traditional grocery outlets reached 33.4%. Convenience store market share for 2005 was 16.2%. By 2010, traditional grocery share is projected to decline to 44.1%, while non-traditional grocery share is projected to increase to 40.5%.And, while convenience store sales will continue to rise, this format is not expected to keep pace with the growth of other retail formats and is projected to have a 15.4% market share by 2010.
Both Hertel and Bill Bishop, founder of Willard Bishop, underscored the need for immediate action by manufacturers and retailers.
Manufacturers need to embrace the changes that are taking place in food retailing today in order to succeed over the long term, said Hertel. Even if new and emerging formats aren't right' for your products, these are the types of stores where Americans are increasingly purchasing their food and consumables.
Bishop cautioned, The key takeaway for retailers is that there's real risk in falling behind in efforts to satisfy shopper needs. Sales are shifting more rapidly than ever before among stores, and the growth is going to the most innovative retailers.
Since 1983, Willard Bishop has published an annual report containing current and projected market share and sales data across multiple channels. Previously called the Store Format Report, this publication delivers an assessment of food-format retailing. The report provides an updated look at 15 food retail store formats and projects the anticipated annual sales growth rate versus inflationfor each formatto the year 2010.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.