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Club, Dollar, Drug Channels Pace Retail Growth: Kantar

NEW YORK — Drug stores, dollar stores and membership warehouse clubs will be the fastest-growing retail formats during the next five years, according to a presentation by Kantar Retail here Wednesday.

Those three formats are expected to outpace Kantar’s projected 4.5% pace of overall retail sales growth by 2018. Supermarkets are projected to grow their sales by about 4.4% in the next five years, Kantar projected.

“One reason club stores and dollar stores will be successful is that they both do a good job curating product,” said Bryan Gildenberg, chief knowledge officer, Kantar Retail.

Drug stores, meanwhile, are in a “sweet spot” because of $15 billion in projected increases in spending on prescription drugs in 2014 through health care reform. That channel is expected to grow about 4.8% in the next five years.


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Health care reform is also expected to boost business at in-store clinics, he said, noting that 30 million more people will be insured started next year, with no real increase in the number of doctors to treat them.

"In-store clinics will become a much bigger deal," he said.

Brick-and-mortar retail sales overall — excluding online sales — are expected to grow at a 3.5% pace, Gildenberg said.

Kantar projected that retail square footage would grow about 1.5% in the next five years, with 60% of that coming from small-format stores like drug stores, dollar stores and convenience stores.

Online food sales are projected to increase from 1% of total food sales currently to about 5% of food sales by 2020.


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