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Be able to differentiate between different types of Food Retail outlets: Supermarket, Convenience Store, Superette, Supercenter, Warehouse Club. Understand U.S. Food Retail sales trend and where growth has occurred.

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u s food retail

Be able to differentiate between different types of Food Retail outlets: Supermarket, Convenience Store, Superette, Supercenter, Warehouse Club.

  • Understand U.S. Food Retail sales trend and where growth has occurred.
  • Be able to explain what has happened to the number of Supermarkets in the U.S. relative to the amount of Supermarket floor space and the number of unique items per store.
  • Explain where concentration in this industry is occurring and whether consumers should be worried.
  • What have been the challenges to “On-Line Shopping”
  • Where has the U.S. Food Retail industry focused improving productivity while lowering operational costs?

U.S. Food Retail

EconS 451: Lecture #4

Source: U.S. Food Marketing System, 2002, ERS-USDA

retail definitions
Retail Definitions

Source: U.S. Food Marketing System, 2002, ERS-USDA

distribution of u s foodstore sales
Distribution of U.S. Foodstore sales

Source: U.S. Food Marketing System, 2002, ERS-USDA

number of supermarkets and sales
Number of Supermarkets and Sales

Source: U.S. Food Marketing System, 2002, ERS-USDA

supermarket definitions
Supermarket Definitions:

Source: U.S. Food Marketing System, 2002, ERS-USDA

loss of market share
Loss of Market Share
  • Conventional supermarkets have lost significant market share to Supercenters and Warehouse clubs. Their strategy to compete is to:
      • Focus on natural foods
      • More pre-prepared foods
      • Promote store/private labels
      • Promote frequent shopper discounts
      • On-line home shopping
      • Self-Checkout
      • More personalized

Source: U.S. Food Marketing System, 2002, ERS-USDA

challenges to on line shopping
Challenges to On-Line Shopping
  • Meeting customers expectation on timely delivery
  • Access to delivery locale in all weather conditions
  • Spoilage for perishables like milk, ice cream, damaged fruit, etc.
  • Inflated delivery costs in low/density areas.

Primary reasons why success has been in high-density cities.

Source: U.S. Food Marketing System, 2002, ERS-USDA

retail mergers divestures
Retail Mergers / Divestures

Source: U.S. Food Marketing System, 2002, ERS-USDA

concentration in food retail
Concentration in Food Retail
  • National Concentration has increased substantially, local market concentration has only increased slightly due to anti-trust oversight and monitoring.
  • Between 1992-1998 C4 ratio of national grocery retailers increased 68.6% while the C4 ratio among the largest 100 cities increased 5.4%.

Source: U.S. Food Marketing System, 2002, ERS-USDA

sales of top grocery wholesalers
Sales of Top Grocery Wholesalers

Source: U.S. Food Marketing System, 2002, ERS-USDA

Food Retail World - Leading Retailers

productivity and average hourly earnings
Productivity and AverageHourly Earnings

Source: U.S. Food Marketing System, 2002, ERS-USDA

foreign owned food retailers
Foreign Owned Food Retailers

Source: U.S. Food Marketing System, 2002, ERS-USDA

summary
Summary!
  • Retail food sales growth has been slow due to slow population growth and growth of fast-food sales.
  • The number of supermarkets has declined while average floor space has increased, understand the benefits associated with this market shift.
  • Nontraditional supermarkets have focused on all natural specialty products (Wild Oats, Whole Foods, Trader Joes).
  • Implications for industry concentration related to upstream purchasing power relative to ability to increase price to consumers.
  • Understand food retail employment productivity changes relative to average earnings per employee.
  • Foreign investment in U.S. Food Retail still relatively small, but investment of U.S. Food Retail from abroad is growing.

Source: U.S. Food Marketing System, 2002, ERS-USDA

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