The numbers aren’t pretty. Supermarket sales were up only
0.12 percent last year and same-store revenues fell 0.82 percent, according
to the 2010 Food
Retailing Industry Speaks: Annual State of the Industry Review from the
Food Marketing Institute (FMI).
"Shoppers’ overwhelming focus on price and value has led to fierce
price competition among food retailers," said Leslie Sarasin, president
and chief executive officer of FMI, in a press release. "As a result,
supermarkets are focused on trying to distinguish themselves from the competition
by fine tuning their private label strategies, SKU reduction and price differentiation
in order to retain their current customers and attract new ones."
57 percent of supermarkets reported declines in same-store sales last year.
As a point of comparison, only 16.9 percent of stores reported declines in
2008. Interestingly, FMI reported that independents (companies with one to
10 stores) bucked the trend with same-store sales increasing 1.62 percent.
took a hit along with sales. Net profits among supermarkets fell from 1.43
percent in 2008 to 1.22 percent last year. Profits in 2009 reached a low point
over a 10-year period.
While supermarkets pointed to the normal means of differentiation
— produce, fresh meat, private label, etc. — the vast majority (86.9 percent)
said they were using price to attract shoppers.
Discussion Questions: What is your view of the state of food retailing today?
Where do you see the business going in the next year or two?
- FMI’s State of Food Retailing 2010: Economy’s Impact on Business
and Fierce Price Competition Remain Top Concerns for Supermarkets – Food