We're only four months into 2014, but we've already seen some of
the biggest supermarket trends and headlines for the history books.
As we look toward the rest of 2014, let's take a brief look at some
of these trends and how they've already made a lasting impact in
the rapidly changing industry…
1. Consolidation: It almost seems like we've seen some kind of
merger and acquisition activity every other week. Not only that,
but these deals have been some of the biggest we've ever seen.
Safeway and Albertsons, anybody? Off the top of my head, other huge
deals that have happened this year include Sobeys' sale of 30
stores in Canada, Safeway's sale of Dominick's and its subsequent
acquisitions, Whole Foods acquires 4 New Frontiers National
Marketplace locations, the list goes on, and I expect it will
continue to go on well into the year.
And why wouldn't it? Further consolidation means there will be
less competitors, which means increased market share. Interest
rates are cheap and companies love to grab as much of the market as
they can to get an edge on the competition. So, who's next?
2. Fresh produce is increasingly important for consumers:
According to Business Insider, more and more consumers are looking
for retailers to deliver on fresh produce over any other product in
the store. It is the main driver in deciding where to shop.
According to a Packaged Facts survey, 75% of consumers say the
produce department is the most important in any supermarket. It
wouldn't be too surprising to see more retailers focus more on
fresh produce aisles in the near future.
3. E-commerce: Online grocery shopping is growing fast and looks
to be evolving into a big contender against the traditional
supermarket. Just within the last month, AmazonFresh has announced
plans to expand its service to 30 - 40 U.S. markets in 2014 along
with a new private fleet of trucks to support this expansion.
Instacart, another up-and-coming online grocery delivery service,
also announced its expansion into the West Coast.
Just recently, FreshDirect was named as the best online grocer,
even above tough contenders like Safeway and Google Shopping
Express! Need I say more? It's clear that online shopping is
delivering on convenience, and more and more consumers are
gravitating towards that. The question that remains is whether the
traditional retailers are willing to up their game against the
4. Smaller store formats: More retailers are looking toward
smaller store formats to compete with dollar stores and take share
away from some of the big-box stores. Early this year, Target
announced plans to construct TargetExpress, a 20,000 square foot
store located nearby the University of Minnesota - about 15% of the
size of the company's regular stores. Last month, Wal-Mart opened
its first Wal-Mart to Go store, which combines a convenience store,
grocery, and a quick-serve restaurant all in 2,500 square feet.
We've even seen Kroger, Food Lion, Giant Eagle, and Sobeys test out
their own versions of the "express" store last year. Who else will
enter the ring? Will we start to see less big box stores?
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