Despite Sales Growth, Supermarkets Losing Market Share

Traditional supermarket operators showed strong sales growth in 2006, but they will still lose share to non-traditional operators over the next five years, according to a presentation yesterday by The Food Institute and Barrington, Ill.-based Willard Bishop Consulting.

ELMWOOD PARK, N.J. — Traditional supermarket operators showed strong sales growth in 2006, but they will still lose share to non-traditional operators over the next five years, according to a presentation yesterday by The Food Institute here and Barrington, Ill.-based Willard Bishop Consulting. Bishop projected that traditional supermarkets will see their share of the $859 billion U.S. market for food and consumables fall to 37.3% by 2011, down from 44.1% today. Supercenters, despite the slowdown in development projected by Wal-Mart, will see their share of the market increase to 20.3%, up from 14.5% today. Traditional supermarkets will register a compound annual growth rate of just 1.4% during that time — less than inflation — vs. 10.7% for supercenters, 9% for limited-assortment stores (which include Trader Joe’s, Aldi and Save-A-Lot) and 7.3% for “fresh format” stores, such as Whole Foods and Wild Oats.

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