2013: Supermarket Share Continues Slide

By 2013, the balance of the food business will tip in favor of general merchandise retailers-those retailers whose sales of food and consumables represent less than two-thirds of their business, according to a report released by The Food Institute and Willard Bishop.

"This is a dramatic shift

"The Future of Food Retailing," is an annual report that projects sales and share trends for general merchandise, food and convenience retailers based on an extensive review of things like trade reports and retailer SEC filings.

"If the current trend continues, food retailers, such as supermarkets and limited-assortment stores, will drop from a 52% share in 2004 to a 40% share in 2013, according to our estimates," says Jim Hertel, Willard Bishop senior vice-president.

"At the same time, general merchandise retailers, such as supercenters and mass, drug, club and dollar stores, will increase their share from 40 percent in 2004 to 44 percent, surpassing food retailers."

Other findings in the report include:

* Two types of stores continue to gain share within food-focused retailers. Limited-assortment stores are expected to grow from a 2005 share of 1.7% of the market to a 2% share in 2009. Fresh stores are expected to grow from a 2005 share of 0.7% to 1.2% in 2009.

* Supercenters continue to gain share, going from a 14% share in 2005 to a projected 17.3% by 2009.

* A more extensive food offering in mass merchants has leveled their share loss in food and consumables to 5.5%.

* Discounters, including clubs, supercenters, dollar stores, mass merchandisers, super warehouse stores and limited-assortment stores, now represent more than 30% of the total market, up from 25% in 2000.

* Food retailers do more than two-thirds of their business in food and consumables, while general merchandise retailers do less than two-thirds of their business in food and consumables.