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CHICAGO -- Through 2010, the “Future of Food Retailing” Webinar held yesterday by the Food Institute predicted that c-stores will continue on modest growth rates, but market shares will decline through 2010.
The report also stated that through 2010, c-stores with gas will have an annual growth rate of 3.4 percent, while those without gas will have a 1.6 percent increase. However, the largest annual growth, according to the report, is “fresh format” stores, with an annual growth rate of 15.9 percent.
This is primarily due to new concepts being introduced and expanding in the food retailing industry, such as dollar stores, new players (Home Depot and Tesco) and fresh formats, the report stated.
C-stores must innovate and deliver convenience to meet consumers needs and maintain market share in food retailing, according to the Food Institute. Leading c-stores, for example, are developing quick-serve restaurants for high-quality food on-the-go.
For retailers to keep market share, Jim Hertel, senior vice president for Willard Bishop, said they have to “develop tools to react to the retail landscape.”
The report outlined a “new format” cycle that retailers can follow. Different stages include new store concepts that when unveiled, attract a lot of attention; successful concepts that expand; stores that imitate a new concept till the market is saturated and market-share falls flat, while the next store concept begins gaining ground.
But no matter what stage in the cycle, there are recommended courses of action that retailers can take to keep up with the new concepts.
For example, when a new concept arrives, existing retailers can bring in new items introduced in it, providing dedicated sections or integrated sets, depending on the products. The report also recommended that opening copycat stores in direct competition could be successful, but warned that it does have a high fatality rate if the new format does not take.
As the market becomes saturated with the new format, existing stores can open up competitor stores that will interact with the new format’s “top shoppers.” Stores must also be on the lookout for the next new format that will be successful, and innovate at a store level.
Furthermore, stores can succeed by connecting with customers through specialized local offerings, event driven merchandise and signature items. The report also suggested looking “beyond the definition of the business,” by making stores hybridize, selling non-traditional merchandise and seeking contacts of global suppliers that can provide new products.