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BARRINGTON, Ill. -- Fresh and easy have become two musts when it comes to food retailing -- and they are two strong suits for the convenience channel.
According to Willard Bishop's annual report, The Future of Food Retailing, consumers' interest in fresh foods and online shopping continues to grow as the housing market and economy start to regain momentum.
"Enthusiasm continues to rise for healthier, non-processed foods and local/organic produce, and stores that deliver continue to be successful," the report said. "A quick and easy shopping experience continues to be a theme, and online shopping for food and consumables continues to grow well into the future."
This year's report highlights what happened in food retail formats in 2013 and forecasts how these formats will perform in 2018.
Convenience stores saw consistent in-store sales growth of 2.4 percent to reach $169.9 billion in 2013. The channel's emphasis on "quick, easy and convenient access to food has been key to its success," according to the researcher.
As for market share of grocery and consumables, the convenience channel captured 15 percent. Convenience stores with gas performed better, taking 12.8-percent share while c-stores without gas took 2.2 percent.
Traditional grocery channel sales increased 1 percent to $522.8 billion in 2013. Market share for traditional grocery formats -- which include traditional supermarkets, fresh format, limited-assortment stores, super warehouse and small grocery -- dipped to 46 percent, according to Willard Bishop.
Non-traditional grocery channel sales increased 3.1 percent to $442.1 billion, with an increase of market share to 39 percent in 2013. Non-traditional food stores continue to take market share from traditional grocery stores. The report classifies wholesale clubs, supercenters, dollar stores, drugstores, military stores and e-commerce as non-traditional.
Looking to the future, c-stores will see a modest annual growth rate increase of 2.1 percent for gas locations and 1.9 percent for non-gas stores. Market share will remain steady, inching up to 15.1 percent by 2018, the report predicted.
Overall, by 2018, the market share for traditional grocery will decrease 1.2 percentage points to 44.8 percent, while non-traditional formats will increase to 40.1 percent. Notably, market share for supercenters will jump to 19.4 percent in 2018, compared to 17.6 percent in 2013, the report added.
Inflation will play a key role in the future numbers. Willard Bishop puts food inflation at 3 percent over the next five years. Traditional supermarkets will not keep pace, the firm said, and will continue to lose market share as consumers choose to shop other formats for their grocery needs.
Barrington-based Willard Bishop is a consumer packaged goods and food retailing consulting firm.