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The Constantly Changing Face of Grocery Stores: It’s Hard to Keep Up!

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Over the months, we have written about the exciting trends taking place in the retail food space.  From drone deliveries, to offering craft beer and wine, to focusing on pre-packaged on-the-go solo gourmet meals. Companies that are deeply invested in the industry are digging deep to come up with competitive solutions to keep up with changes in consumer taste and demand.

We are sharing this new viewpoint as part of our blog series covering the evolution of the grocery chain in the United States.

While most North Americans continue to buy their groceries at a traditional supermarket, the demand for new shopping experiences is having a major impact on the sector. And for all practical purposes, it seems as if many of these changes will have lasting effects.

Lots of choices

At one end of the industry there is growing competition for brick and mortar businesses – which comes from online providers like Amazon, and more recently Wal-Mart and Target. Using technology to offer the convenience of remote shopping, lower costs and a wide variety of choices, there is growing change taking place as consumers exercise their evolving purchasing/shopping options.

No one can ignore that in the middle of the continuum there is the consistently rising popularity of discount chains like Aldi and Lidl that offer no frills but deep discounts.  When price is driving purchasing decisions, it makes things very difficult for traditional grocers. The traditional family owned stores and small chains can’t slash prices to the extent the discounters can, namely because of higher overhead costs. 

And then, at the other end of the spectrum, there are small, unique grocery stores popping up locally that offer a boutique atmosphere and distinctive options that are compelling across all generations of shoppers. Ignoring the expediency of internet grocery shopping, this new style store goes the opposite way – believing that people enjoy developing a sense of community. These small specialty stores each provide a distinctive and innovative approach.

Opportunities across the country

In a recently published New York Times article entitled, “The Freshest Ideas are in Small Grocery Stores,” author Kim Severson describes a store called Nada in British Columbia where all goods are package-free. In addition, customers can purchase a handful of crackers or just one egg if that is what they need. Severson shared other insights into other distinctive grocers: there is Zero Market in Denver; likewise Fillery is being built in Brooklyn; Farmhouse Market, in New Prague, MN, serves the community of 7,600 people with local, organic items and 24 hour access with a key card and self-checkout. In Baltimore, Doing the Most Good is run by Major Gene Hogg of the Salvation Army as an experimental nonprofit, providing fresh food options in an area where many don’t have cars and   people shop daily instead of loading up weekly.

As the NY Times report demonstrates, the big, well-known chains are constantly adapting to these changes and many are adding their own innovative touches. But nonetheless they find themselves going head to head against small, bold entrepreneurs who are permanently changing the shape of the grocery store world. 

Chris Martin, CPA
chris.martin@sobelcollc.com 
Sobel & Co.

 

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