Grocery Business - October 2018

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he past ;; weeks have been a roller coaster for national grocery retail sales, with shifts in what items drive sales growth across food departments deviating from previous years. While total store sales across food, beverage and nonedibles have topped ;;;; billion, adding ;;; billion more sales dollars since the same period in ;;;;, the growth’s sources are not the same as in previous years.

In fact, nonperimeter food and beverage
items grew total store sales share for the ;rst
time in three years. Most surprising, as of ;;;;,
CPG edibles have outpaced fresh perime-
ter food sales growth by nearly ; percentage
point, with the New England and the Great
Lakes regions struggling the most to grow
perimeter sales. While fresh is still in demand,
key considerations contributing to the slow-
down include increased competition, price
pressures, lack of di;erentiation and a renais-
sance in foods within the frozen, refrigerated
and general food departments, including
innovation around quality, ;avors and healthy
options.

It is more important than ever for retailers to consider new trends in shopping and how to meet consumers’ shifting demands. For IRI’s recent Top Trends in Fresh series, we partnered with the Food Marketing Institute to break down consumer trends and potential for growth into three key areas: format experimentation, service customization and customization continuum. We’ll save the last Category Close-Up

The Future of
Fresh in the
Crosshairs of Upheaval

Fresh Business

Satisfying changing consumer preferences and the desire for customization can put grocers in a prime position. By Jonna Parker

T

topic for a future article on value-added meal kits and specialty foods and discuss how much prep time and e;ort consumers are willing to put into their meals.

Format Experimentation
Pressures Fresh Dollars

For the past several years, nontraditional fresh retailers, including dollar and deep-discount stores, have recognized and met consumers’ requests for fresh food o;erings. Aldi is at the forefront of this revolution, with a recent IRI consumer survey ;nding that fresh produce is one of the top items consumers are most interested in buying at Aldi. This shifting consumer interest shows a direct correlation to the fragmentation of fresh dollars for traditional retailers in recent years.

In the year ending June ;;;;, grocery still accounted for ;;; of all produce dollars spent across outlets; however, consumers are spending less there versus last year and spending more on produce at Aldi, online and at dollar stores. Most impressive, Lidl already accounts for ;.;; of all national produce spending after being open only for six months, according to insights from IRI’s Consumer and Shopper Insights Advantage With Fresh, for the ;; weeks ending June ;;, ;;;;.

The greatest shift for nontraditional fresh stores has been their rapid expansion, with dollar, deep discount and mass dominating new store openings in ;;;;. As deep discounters