Report Reveals 2014 Grocery Trends

PEAPOD VIRTUAL GROCERY STOREFive years from now, the U.S. grocery landscape is set to look markedly different.

Planet Retail has released a report titled “U.S. Grocery Retailing 014: Top trends shaping tomorrow’s landscape,” analyzing five big trends reshaping the grocery landscape

“Change is the only constant. An old saying indeed, but one that aptly captures the direction U.S. grocery is heading,” noted Sandy Skrovan, U.S. research director at Planet Retail and report author. “Five years from now, the retail grocery landscape will look markedly different than it does today. A number of changes in the macro landscape—slow recovery, healthcare expansion, income squeeze, shopper shifts—will cause retailers to reconsider strategies. Perhaps the biggest change-driver will be on-the-go consumers, busy but constantly connected.

“Retailers can no longer expect shoppers will come to them, but instead must prepare to be where the shopper is. This could easily mean thousands of small boxes dotting the competitive landscape, locating closer and closer to where shoppers live, work and play. It could mean no stores at all, as online and mobile shopping ramp up. And a Drive concept which is fundamentally non-existent today in America, compared with overseas developments, gains traction.”

The five big trends include:

Small footprints make big move. “After years of building larger and larger stores to stock more and more products, some leading retailers are realizing that future success might come from going smaller—especially as more sales go online,” said Skrovan. “Six of the top 10 banners on Planet Retail’s fastest-growing U.S. retailer list are small-box formats, like CityTarget/TargetExpress and Walmart small formats. In aggregate, we project these six growth-oriented banners will grow sales at an average pace of 18% a year through 2018—quite favorable when stacked up against the less than 4% annual growth we project for U.S. grocery channels as a whole.”

Growth of good-for-me retail. “The shift is on for retailers as ‘wellness advocates.’ Access to convenient, affordable healthcare and good-for-me solutions is a growing concern under the Affordable Care Act,” Skrovan added. “Today we see drugstores transforming into healthcare hubs and grocers going after a holistic health experience. The door is open for a lot of innovative and distinctive products, services and solutions to find their way online and on store shelves.”

Sea-change for Walmart. “We see 2014 marking an inflection point for Walmart. And we’re not gearing up for just change, but a sea-change. Hundreds of small formats coming on board; the Drive concept emerging as the next-gen Site-to-Store model, and a supply chain reinvention to further fuel the productivity loop—all quite possibly sparking Walmart’s next round of growth,” said Skrovan.

Grocery-to-go grows up. “It was bound to happen—we view the AmazonFresh roll-out as a huge game-changer, disrupting existing grocery models. We forecast click & collect services to accelerate and the Drive concept to gain legs. Retailers will need to rethink their go-to-market strategies,” Skrovan said.

Digital disrupts shopper journey. “Online, mobile and social media are giving consumers a wealth of choices on how to engage, interact and shop. Planet Retail’s proprietary online shopper survey findings suggest that two out of five online shoppers want to receive real-time offers via their smartphones while they shop. A third wants to use their smartphones to help them navigate the store to find items. These types of functionalities will become ubiquitous in just a few years,” Skrovan said.  “The bottom line is that retailers and marketers must be on their games to attract and keep shopper interest in this ever-changing environment.”

To download a sample of this report click HERE.

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