Grocery and Specialty Food Stores Must Evolve to Remain Profitable
In our white paper, The 5 Biggest Threats in the Food Retail Landscape and How to Handle Them, we give you the practical tactics you need to combat the most significant threats to your business.
After taking an exhaustive look at the current state of the food retail industry, we’ve uncovered a few trends that are shaking things up. It’s no longer “business as usual” for this industry. The threats are real. How you respond will determine whether you struggle or thrive.
Here are the five major threats that are impacting your grocery or specialty food store’s profitability:
- Threat #1: Lower Prices and Lower Margins – A spike in manufacturing and transportation costs due to supply chain issues have significantly driven up the price of food staples. At the same time, grocery retailers are feeling the burden to reduce prices in order to remain competitive with low-priced chains. How will you deal with this downward pressure on your margins?
- Threat #2: Overcrowded Sector – Everyone is selling groceries these days. Dollar stores, drug stores, convenience markets, and other outlets are crowding the space. As the food retail sector is becoming more saturated, competition is getting fiercer. Deep discounters are attracting the budget-minded shopper. Internet retailers are attracting higher-income shoppers. Where are you staking your claim?
- Threat #3: Shoppers are Shopping Around – There once was a time when people shopped at just one grocery store. It was their home grocery store. It was a place where they were most comfortable. Now, with retail options multiplying, shoppers are willing to look elsewhere to have their needs met. How can you regain their loyalty?
- Threat #4: Online Grocery Shopping – A click of a button. Door-to-door delivery. Grocery shopping is now a most-welcomed convenience. In 2023, online grocery sales are expected to top $160 million. Are you prepared to compete in the online grocery shopping era?
- Threat #5: Amazon’s Acquisition of Whole Foods – The Amazon-ification of grocery stores has begun. Amazon’s acquisition of Whole Foods, and new services like Amazon Fresh and Amazon Go, are having an impact on the grocery sector that has never been seen before. How will you respond?