TheChangingRetailLandscape

Dr.JohnL.StantonProfessorofFoodMarketingSaintJoseph’sUniversity

jstanton@sju.edu

Afterbeinginthefoodindustryforthepast40yearsIbelievetherehavebeenmoresignificantchangesinthepast5

thantheprevious35

Whowouldhavethought5yearsagothatthelargesthotelchainwouldbe

Airbnborthelargestretailer

AlibabaOrthelargesttaxi/limocompany

Uber

It’sawholenewworldoutthere.

FamilySize• Womenwantsmallerfamilies

• Therateofvoluntarychildlessnessisrising,makingDINKs(DualIncomeNoKids)avaluablemarketsegment

SJU Food Marketing

SandwichGeneration• Sandwichgeneration:adults

whocarefortheirparentsaswellastheirownchildren

• Boomerangkids:adultchildrenwhoreturntolivewiththeirparents

– Spendlessonhouseholditemsandmoreonentertainment

SJU Food Marketing

TheHispanicpopulationwillincreaseby167%versusnonHispanic

whiteby1%

Millennialsaredifferent

Ifmostofyoursaleshavebeengoingthroughtraditional

supermarketsyouaresellingtoadecliningmarket

Retailisgoingthroughanunprecedentedperiodofrapid

dynamism- andthisisprimarilyduetoachangingshopper.- PlanetRetail

EveryoneWillTryTo

SellConsumersTheirNext

Meal

Keytrendsdrivingconsumers:convenience,

value,health&wellnesspersonalization.

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Supermarkets Masschannel Drugstores Conveniencestores* Warehouseclubs Valuechannel

US:ChannelSizesbySales,2007-2017f(USDbn)2007

2012f

2017f

Some channels are no longer ‘alternative.’

Once considered ‘alternative,’ the warehouse club and value channels are growing sales faster than traditional channels, i.e. supermarkets and supercenters (mass).

*Note: Convenience store sales represent merchandise sales onlySource: US Department of Commerce, National Association of Convenience Stores and Planet Retail

Supermarketsalsohavefewershoppingvisits!

Downto1.2timesaweekfromasmanyas3timesaweekjustafewyearsago

Whatdoesthismeantocandy!Fewer“impulse”occasionsLesstimespentshopping.

MassMerchants

Consumersareturningawayfrombig-boxstores- thecorechannelformost

oftheleadingfoodcompanies.-PlanetRetail

• Walmarthaveleveled

• Expectedgrowthrate($sales)expectedtodeclineto2020to1.9%

• Theretailerisshuttingdown269storesgloballythismonth,includingall102ofitsWal-MartExpressstores.

Letslookathowtheseconsumerchangesareeffectingretail

Small box stores are growing…fast

Pharmaciesaresellingmorefoodeveryyear!

Whereareallthesupermarketshoppersgoing?

NPDreportsthattheaveragenumberofvisitsconsumersmadetoac-storeinanaverage30-dayperiodgrewto6.4comparedto1.5forsupermarkets

Couponsarebeingprintedforimmediatepurchaseinsidethestore!

TVhomeshopping

• HSNandQVCarealreadyintofoodbutjuststarting.

• Oneshowsold$1millioninofpastasauce30minutes!(at$14.00ajar)

WhatdoesHSNsell??

• Appetizers&Sides(15)

• Beverages(77)

• Bread,Muffins&More(7)

• Brownies,Cakes&Cupcakes(92)

• Chocolate&Confections(50)• Coffee&Tea(20)

• Cookies(25)

• Entrees(33)

• FoodStorage(14)

• Fruits&Nuts(13)

• Meats&Poultry(55)

• Mixes(45)

• Sauces&Seasonings(10)

• Seafood(9)

• Sweet&SaltySnacks(36)

For only $48 and $7 shipping

Whataboutsubscriptionservices.

Ifyouarenotcomingtothestoreregularlysendittothemregularly!

20FantasticSubscriptionBoxesEveryoneNeedsRight Now

http://www.buzzfeed.com/kherhold/the-20-best-subscription-boxes-og3b#.uuydmKN7Z

BlueApronWhereisthesweets?

Fresh,nutritiousmealsandsnackspreparedbyouron-sitegourmetchef.

Home-styleMealsAvailableforTakeout

• 1700Kindercare Do you think mothers mightValue a brand calledKinder Care brand food for Kids

YahooDem

Office DeliveryAustinGrocer.Com works regularly with businesses to offer office delivery options, including healthy lifestyle snacks and drinks fit to your company's needs. Something a vending machine wont give you

Companies like Campbell soup in involved

Supermarkets in Airports?The new 300sqm supermarket, operated by the BILLA chain, is located between terminals 1 and 2 to ensure maximum convenience for airport customers and visitors.

AirportFreshProduce

AproducestandatMinneapolis-St.PaulInternationalAirport’sDeltaterminal.

AproducestandatLaGuardiaAirportinNewYorkCity

Forgetabout

smoothiesHealthclubsare

nowwooingwithfancy

cuisine

VendingWillBeUbiquitous

• Surecandyhasalwaysbeeninvendingmachinesbutnotlikethese.

SupermarketVending

FrontLobbyNowyoucanbe24hours!!

HomeCentersaresellingfood.

PlacessuchasStaplesandOfficeDepotaresellingmorefoodeveryyear.

How much do they sell?•Caramels (26)•Chocolate (211)•Gum (54)•Gummy & Sour Candy (225)•Hard Candy & Lollipops (174)•Licorice (14)•Mints (235)

HowaboutTruckstops

• TravelCentersprovidesprofessionaldriversservicesforthelonghaul.Thecomplexdesignincludesgasoline,foodservice,retail,entertainment,andotherroadsideconveniences.

TravelCenters

CollegeBooksstores

• Thinkcollegestudentseatalot?

• Drinkalot?• ThinktheygototheSupermarket?

• ThinkBookstoresmightwanttomakemoremoneyason-linestealstheirbooksales

TheElephantInTheRoomE-commerceSocialmedia

GetCouponsOrPromotionalMessagesInTheAisle!

French grocer Casino undertook a first trial of its digital shopping wall in Lyon in October 2012.

Tesco South Korea caused a stir in 2011 with a QR code wall – enabling shoppers to add items to online baskets by scanning the code. Orders were then delivered that evening. Test locations included a subway in Seoul (above).

Online grocery retailer Ocadolaunched a virtual shopping wall at the One New Change shopping centre in London in August 2011.

Areyouignoringtheemergingdistributionforfood?

• Areyouputtingalltheireggsinonebasket

DarwinHasOftenBeenMisquotedAsSaying‘OnlytheStrongestSurvive.’

However, what he really said was “In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.”

Charles Darwin (1809 - 1882) The Origin of Species 1859