TREND WATCH 2000

The industry gathers next week in Chicago for the Food Marketing Institute's annual convention, so why not get ready to talk issues by taking a look at the front page of this week's Supermarket News? The leading news feature this week, "Trend Watch 2000," endeavors to sweep together and analyze key trends that will define what the industry will look like at the turn of the century, and beyond. The

The industry gathers next week in Chicago for the Food Marketing Institute's annual convention, so why not get ready to talk issues by taking a look at the front page of this week's Supermarket News? The leading news feature this week, "Trend Watch 2000," endeavors to sweep together and analyze key trends that will define what the industry will look like at the turn of the century, and beyond. The report was prepared at the request of SN editors by several writers at Management Horizons, the consulting division of Price Waterhouse. This week's news represents an update of a well-received Management Horizons report entitled "Retailing 2005." It was outlined in this space last July. Here's a brief outline of some of the trends this week's multipage report identifies and analyzes:

The consumer paradox: The situation reported here is that consumers are relatively well off at the current time, but don't believe that to be true, nor act as if it were true. To the contrary, a consumer gloom has blown up that is trimming consumer spending. In short, consumers now pinch pennies as if they were nearly destitute, even though that's far from reality.

The gloom is spread by popular culture, such as television programs that imply that everyone -- except the suffering viewer -- is prodigiously well off. Gloom also pervades the content of news broadcasts and articles that imply that the world is a far more tenuous and economically deprived place than it actually is. No wonder consumers opt to husband resources against a cruel future.

Dinner sources: Unquestionably, an increasing number of food dollars are being spent at places other than the supermarket. The report estimates consumers now spend 39% of their food dollars on food for consumption away from home, compared with 31% in 1980. Actually, I have seen studies that have the current ratio much higher than this, but, in any case, the trend is likely to continue in the direction suggested by these numbers.

Supercenters: The report says supercenters will continue to capture food dollars, and grow to the level of about $91 billion by the end of the century. That would represent an annual growth rate of about 30% from 1995 forward. It isn't impossible to compete with a supercenter, but they are tromping with big feet right now, and will continue to do so.

Concentration: There has been huge economic concentration in the food business under way for several years, driven by acquisitions and failures in food, mass and drug retailing, plus manufacturing. This will certainly continue, and may translate into greater intra-industry cooperation, simply because fewer players will be involved.

Manufacturer direct selling: Some manufacturers may opt to bypass conventional retailing venues altogether, going the way of home delivery or outlet stores. On top of that, retailers, wholesalers, manufacturers and nonaligned entrepreneurs can be expected to tinker with home delivery schemes driven by the Internet. Delivery depots dedicated to improving the economics of home delivery can be expected to spring up. Take a look at this week's report on the future of the industry if you want to see the shape of things to come start to take on more distinct edges.

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