NEW YORK — The rate at which traditional supermarkets in the U.S. lose share to alternative formats will slow as the leading grocers roll out sales-building strategies, according to a research note from Moody’s Investors Service here.
"We expect supermarkets to reduce prices, reward loyal customers and expand offerings of organic products and private-label items to woo customers and boost sales," said Mickey Chadha, a Moody's vice president and senior analyst. "That said, the performance gap between efficient operators who evolve with the changing competitive landscape — such as Kroger  — and those that don't will widen."
The report estimates that supermarkets’ share of food eaten at home has fallen to 64.5% in 2010, vs. 72.1% in 2000, amid the expansion of big-box stores like Costco  and Wal-Mart  and the addition of more consumables by dollar stores.
Read more: Moody's Downgrades Supervalu Ratings 
Moody’s said supermarkets that employ an EDLP strategy, are innovative and “embrace secular changes in the industry,” like Kroger Co., Safeway , Stater Bros. Markets  and Wegmans Food Markets , and niche players like Whole Foods Market , The Fresh Market, Sprouts Farmers Market , Smart & Final  and Trader Joe's , among others, will see revenue and operating profit growth.
Extreme-value discount supermarkets such as Aldi , Bottom Dollar Food and Save-A-Lot “will also continue to grow as cost-conscious consumers seek to stretch their dollars,” the report stated.
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