Food retailers continue to face challenging economic times as the Great Recession, albeit now officially over, has changed and accelerated changes in consumer behavior and the retail marketplace. Shopping patterns have shifted as consumers have re-evaluated the price-value equation, and the lines dividing retail channels continue to blur.

1.
Get more info on this report!
The Future of Food Retailing in the U.S., 3rd Edition
February 1, 2011
Food retailers continue to face challenging economic times as the Great Recession,
albeit now officially over, has changed and accelerated changes in consumer behavior
and the retail marketplace. Shopping patterns have shifted as consumers have re-
evaluated the price-value equation, and the lines dividing retail channels continue to
blur. Growing competition, emerging and merging retail formats, price wars, the
burgeoning strength of private labels, retailers as arbiters of wellness and nutrition
management, SKU rationalization (or not), and experiments with Internet marketing and
digital technologies are just a few of the trends that promise to reshape food retailing in
the near-term future. More than ever, retailers and marketers of consumer packaged
goods need to keep a close watch on macro and micro trends alike, and adjust their
merchandise assortments, pricing, and marketing strategies accordingly.
The Future of Food Retailing in the U.S. offers a comprehensive examination of the
overriding trends in the market, highlighting opportunities and strategies retailers and
CPG marketers can use to optimize their businesses during the coming years. The
report provides detailed analysis of trends in the key retail channels through which
foods and beverages are sold, including Grocery (major and independent supermarkets,
natural food stores, ethnic supermarkets, traditional small grocery stores, and
gourmet/specialty stores), Value (supercenters, mass merchandisers, warehouse clubs,
dollar stores, and limited assortment stores), Convenience (convenience stores), and
Alternative (drugstores, farmers’ markets, online grocery services, vending machines,
and other alternative venues). In-store merchandising and food preparation trends,
category sales trends, marketing trends, and media trends including use of new social
media are also covered.
Market Insights: A Selection from the report
Almost Two out of Three Consumers Buy Supermarket Take-Out

2. A February 2010 proprietary consumer survey by Packaged Facts determined that—not
surprisingly—with its strong value, cost, and convenience propositions, the fast-food
industry enjoys usage consumer that approaches saturation (93%). However, almost
two out of three (64%) survey respondents have bought ready-to-eat and heat-and-eat
food from a grocery store/supermarket in the past month, a testament to the high
likelihood of grocery store/supermarket use and the continuing growth of prepared foods
in that retail channel.
[Figure 3-1]
Warehouse Clubs to Push the Prepared Foods Envelope
With its strong private-label program (driven by the well-known Kirkland brand, generally
known for both high-quality and competitive prices) we believe Costco has significant
potential to grow its prepared foods sales. Its strong, high-quality private-label presence
is an ideal platform: Costco’s private-label Kirkland brand has strong brand equity and a
loyal consumer following. This private-label halo can only give consumers confidence in
similarly marketed prepared foods. Costco does not break out its prepared foods sales.
However, in a November 11, 2010 telephone interview with Packaged Facts, Costco
CFO Richard Galanti said that Costco now sells “close to 50 million rotisserie chickens”
annually.
Prepared Foods in C-Stores
As discussed in Chapter 5—”Convenience Channel Trends,” according to Convenience
Store News’ latest “Industry Report” (June 2010) foodservice now accounts for 13% of
in-store sales at convenience stores, making it the largest in-store category after
cigarettes. Many cstore operators have successfully turned their stores into popular
destinations for both hot and cold foods prepared on-site, such as deli sandwiches, flat
breads, hoagies, breakfast sandwiches, hamburgers, pizza, grilled chicken sandwiches,
salads, soups and wraps.
Yet, with competition from drugstores on the horizon, convenience stores will no longer
be the only “around the corner” pick-up-and-go choice. With respondents to Packaged
Facts’ February 2010 proprietary survey giving c-stores relatively low scores on food
enjoyment, great taste, and high quality, convenience stores may find customers going
elsewhere for food that offers better taste and quality.
A Look at the Future
Looking a bit further down the road, we believe that hybridized food retailers and
restaurants will, in fact, be the rule rather than the norm, representing a seismic shift in
both the food retailing and foodservice industries. Accordingly, Packaged Facts expects
to see both food retailing and foodservice channels continue to converge around fresh
prepared foods, working fervently to make their consumption more convenient. As a
result, the competitive lines between grocery stores, restaurants, convenience stores,
and other channels will continue to blur.

3. Table of Contents
Chapter 1: Executive Summary
Scope of Report
Report Methodology
A Broad Spectrum of Retail Channels
Total Retail Food and Beverage Sales Almost $560 Billion
Table 1-1: U.S. Retail Sales of Foods and Beverages, 2006-2015 (in millions of
dollars)
C-Stores Outnumber Supermarkets Four to One
Supermarkets Ring Up Over Half of 2010 Food and Beverage Sales
Figure 1-1: Share of Food and Beverage Dollar Sales by Retail Channel, 2010
(percent)
The Top 20 U.S. Food Retailers
Market Outlook
Table 1-2: Top 20 U.S. Retailers by Estimated Food and Beverage Sales, 2010
(in billions of dollars)
Some Stores Walloped; Others Thrive in the New Economy
Conservative Spending Expected to Continue
Consumers Dining Out Less, Cooking More
The Overriding Trend: Value
More Competition
Small Is Big
SKU Rationalization
Increased Private-Label Penetration
In-Store Foodservice
Fresh Formats
Health and Wellness
Sustainability Is Profitability

4. Marketing and Media Trends
Chapter 2: Introduction
Market Overview
Scope of Report
A Broad Spectrum of Retail Channels
Share-of-Stomach Competition Also Includes Foodservice
Total Retail Food and Beverage Sales Almost $560 Billion
Table 2-1: U.S. Retail Sales of Foods and Beverages, 2006-2015 (in millions of
dollars)
Other Estimates in the Same Ballpark
Figure 2-1: Sales of Food-at-Home and Food-Away-from-Home, 1959-2009 (in
billions of dollars)
Retail Food and Beverage Sales Will Near $700 Billion by 2015
Market Composition
C-Stores Outnumber Supermarkets Four to One
Supermarkets Ring Up Over Half of 2010 Food and Beverage Sales
Figure 2-2: Share of Food and Beverage Dollar Sales by Retail Channel, 2010
(percent)
Table 2-2: Competitive Analysis of Retail Food and Beverage Channels, 2010
The Competitive Landscape
The Top 20 U.S. Food Retailers
Table 2-3: Top 20 U.S. Retailers by Estimated Food and Beverage Sales, 2010
(in billions of dollars)
Recent Mergers and Acquisitions
Market Outlook
Economic Environment
Inflation + Deflation, But Food Prices Projected to Rise in 2011
Table 2-4: Changes in Consumer Price Indexes for Food, 2008-2011
Some Stores Walloped; Others Thrive in the New Economy

5. Conservative Spending Expected to Continue
Consumers Dining Out Less, Cooking More
Government Regulation
Food Safety Bill Passes Congress
USDA to Require Nutrition Labels on Meat
Chapter 3: Trend Overview
The Overriding Trend: Value
The Top Consumer Priority
More Competition
More Types of Stores Focusing on Foods
Channel Migration: Who’s on the Winning Side of the Equation
Table 3-1: Consumer Packaged Goods Household Penetration by Retail
Channel, 2010 (percent)
Different Channels Satisfy Different Trip Missions
Small Is Big
Pendulum Swinging Back to Smaller Store Formats
Fresh & Easy Inspired Seismic Market Shifts
Walmart Experiments with Several Smaller Formats
Walmart Plans Small Format Urban Stores
Safeway Also Testing Smaller Format
How Viable Are Smaller Stores?
SKU Rationalization
Product Proliferation Is Rampant
Table 3-2: U.S. Food and Beverage New Product Launches, 2001-2010
(number)
SKU Rationalization (or Not)
Examples of SKU Rationalization Strategies
Kroger Successfully Eliminates 30% of Cereal SKUs

6. Walmart Cuts Too Deep
How Giant-Carlisle Analyzes Categories
Jewel-Osco Slashes SKUs by as Much as 25%
Doing SKU Optimization Wrong—and Right
Increased Private-Label Penetration
Private Label a Top Retail Differentiation Strategy
Private Label Ripe with Opportunities
Table 3-3: U.S. Retail Sales of Private-Label Foods and Beverages, 2009-2014
(in millions of dollars)
Private-Label Introductions Double in 2010
Table 3-4: U.S. Private-Label Food and Beverage New Product Launches, 2006-
2010 (number)
Fresh & Easy Leads in Private-Label Introductions
Table 3-5: Top 20 U.S. Retailers/Wholesale Grocers Launching Private-Label
Foods and Beverages by Number of SKUs, 2006-2010 (number)
Poor Economy Helps Private Label Get Ahead
Private Label vs. National Brands
Safeway and Supervalu Strengthen PL Hold
In-Store Foodservice
Food Retailers Morphing into Foodservice
How that Translates to Dollars
Almost Two out of Three Consumers Buy Supermarket Take-Out
Figure 3-1: Foodservice Use in Past 30 Days: By Channel, February 2010
(percent)
Mean Use of Foodservice
Figure 3-2: Foodservice Mean Use in Past 30 Days: By Channel, February 2010
Foodservice by Usage Occasions
Figure 3-3: Foodservice Use Occasions in Past 30 Days: By Channel, February
2010

7. Prepared Foods in Supermarkets
Figure 3-4: Supermarket Deli Prepared Foods, Share of Sales: By Food Type,
2009 (percent)
Walmart Moving into Prepared Foods with Marketside
Target Creates Springboard for Prepared Foods
Warehouse Clubs to Push the Prepared Foods Envelope
Prepared Foods in C-Stores
Drugstores Moving into Prepared Foods Territory
Turning Grocery Stores into Restaurants
A Look at the Future
Fresh Formats
Emphasis on Fresh Foods Continues to Grow
Organic Foods Slowing, But Remain an Area of Opportunity
Local and Artisanal Foods Are Growing Trends
A Return to In-Store Butchers?
Illustration 3-1: TOPS “Real Meat — Real Butchers” Ad
Health and Wellness
Retailers Becoming Arbiters of Wellness and Nutrition Management
Health and Wellness a Marketing Hook
Healthy Eating Programs
Supermarkets Offering In-Store Dietitians
Retailers’ Nutrition Ratings
Sustainability Is Profitability
Ethical Consumerism
Retailers Spearhead Animal Welfare Standards
Cage-Free Eggs a Hot Button
More Retailers and Dairies Go Hormone-Free
Fair Trade Going Mainstream

8. Greener Stores
Walmart’s Sustainability Scorecard Makes Slow Progress
Sustainability = Profitability
Plastic or Paper?
Tesco Testing Zero-Carbon Supermarket in England
Chapter 4: Grocery Channel Trends
Grocery Channel Leads Food Sales
Figure 4-1: Growth of Sales at Traditional Food Stores, 1999-2009 (percent)
Even National Supermarket Operators are Regional Players
Table 4-1: Top 10 U.S. Supermarket Chains by Retail Dollar Sales, 2009 (in
billions of dollars, percent, and number)
Kroger: Solid Strategies Mean Solid Gains
Kroger Is Sophisticated in Mining Consumer Data
Private Label a Competitive Strength
Safeway Combines Lifestyle with Price Parity
Lifestyle Format Stung by Recession
Safeway Experiments with Small Formats
Targeting More Private Label
Supervalu Realigning Its Business
New Focus is Consumer-Centric, Hyper-Local
SKU Rationalization, Clean Floor Strategy
Supervalu Sells Some Supermarkets; Expands Save-A-Lot Discount Chain
Supervalu Targets Consumers with Health and Wellness Options
A&P’s Struggles Continue
While Winn-Dixie Rises from the Ashes
Regional Chains Set Exemplary Examples
Publix a Public Favorite
Publix’s GreenWise Market

9. Wegmans Raises the Bar on Grocery Shopping
Whole Foods: The Natural Leader Reemerges as a Growth Leader
Focusing on Value Yields Rewards
Good Deeds
New Sustainable Seafood, Animal Welfare, and Healthy Eating Initiatives
Strong Focus on Prepared Foods and In-Store Dining
Ethnic Food Markets Thriving
Specialty Food Stores
The Secrets of Trader Joe’s
Chapter 5: Value Channel Trends
Supercenters
Walmart Is the Nation’s Largest Food Retailer
Groceries Grow to 51% of Walmart’s Sales
Walmart Revamps Great Value Private-Label Brand
Economy Hits Walmart Customers Hard
Walmart Makes Serious Mistakes…
…and Tries to Correct Them
Thinking Small, Walmart Is Downsizing Stores for Urban Markets
Walmart Testing Pick Up and Delivery Services
Supermercado de Walmart Opens in Houston
Walmart Seeks Collaborative Sourcing with Suppliers
Target-ing Foods
Target Pushing into Fresh Foods
And Opening Smaller Format Urban Stores
Kmart Still Struggling to Find a Path
Warehouse Clubs Maintain Balance, But Not Status Quo
Costco Wholesale Corp

10. Costco Looking to Open More Stores in Malls
Sam’s Club Seeks to Catch Up with Costco in Foods
Sam’s Targets Hispanics with Mas Club
BJ’s Wholesale Club
Dollar Stores Adding More Food to Their Product Mix
Dollar General Revamping Store Format(s)
Family Dollar
Dollar Tree
Limited Assortment Chains Making Waves
Chapter 6: Convenience Channel Trends
Convenience Stores and Drugstores Filling in for Mom-and-Pop
C-stores Changing With—and Changing—the Times
Foods and Beverages 37.5% of C-Store In-Store Revenues
C-Stores a Growing Competitor for Foodservice Dollars
7-Eleven’s “First, Best, and Only” Strategy
Illustration 6-1: 7-Eleven’s 7-Select Store-Brand Packaged Snacks
Fresh & Easy: British Invasion Falls Short
The Fresh & Easy Model
Tesco Also Imported its Own Infrastructure
Sheetz, Inc.
Wawa, Inc
Several Supermarket Chains Also Have C-Stores
Kroger Is One of the Largest C-Store Operators
Giant Eagle Uses Supermarkets and C-Stores to Create Synergies
Drugstores Also Compete on the Convenience Angle
Drugstores Fight Back as Retail Lines Blur
Drugstores Testing Fresh Foods

11. Walgreens Creating “Food Oases”
Duane Reade Setting Food Examples
Illustration 6-2: Duane Reade’s DR Delish Premium Private-Label Snacks and
Beverages
CVS Caremark Doubling Food Sections in Nearly Half Its Stores
Rite Aid Piloting Co-Branded Stores with Save-A-Lot
Can the Drugstore Channel Compete in Fresh Foods?
Drugstores Will Become the New Neighborhood Grocers
Chapter 7: Alternative Channel Trends
Farmers’ Market Count Increases 16% Since 2009, to Over 6,100
Figure 7-1: Growth in Number of Farmers’ Markets, 1994-2010
Two Types of Farmers’ Markets
Produce by Prescription
Farmers’ Markets Complain About Grocery Competition
Community Supported Agriculture Programs (CSAs)
Vending Machines Offer Convenience 24/7
Vending Homes in on Fresh Fruit and Vegetables
Kraft Foods Testing Interactive Vending Machines
Japan Testing Vending Machines with Facial Recognition
Online Grocery Services
FreshDirect an Interesting Model
Big Guns Testing Online Ordering Services
Thinking Outside the Box
Mobile Food Trucks
Pop-Up Stores
Other Alternative Channels Target Impulse Sales
Chapter 8: Marketing and Media Trends
Shopper Marketing

12. What, Exactly Is Shopper Marketing?
Technology Is Changing Marketing Vehicles
Advertising Trends
Biggest Media Spender Is Walmart
Table 8-1: Advertising Spending for Selected Top Food and Beverage Retailers,
2007-2009 (in millions of dollars)
Bloom’s Grill-Board Uses Traditional Ad Medium in a Non-Traditional Way
Illustration 8-1: Bloom Grocery’s Steak-Scented Billboard
Resurgence in Coupons
Digital Coupons Soaring
Customized Coupons Leverage Loyalty Card Data
Kroger the Pioneer in Personalized Coupon Offers
Sam’s Club eValues a Perk for Plus Club Members Only
Safeway Just for U
Illustration 8-2: Safeway’s Online Coupon Center
Meijer’s mPerks uses Phone Numbers, Not Cards
Coupon Strategies
Using Social Media
Making Use of Websites and Social Media
Illustration 8-3: Whole Foods Market’s Facebook Newsletters
Illustration 8-4: Safeway’s Facebook Page Blog
Twitter
Table 8-2: Selected Retailers’ Facebook and Twitter Fan Bases, January 7, 2011
(actual count)
F-Commerce Is Coming
The Smartphone Revolution
QR Codes
Illustration 8-5: Port Townsend Food Co-op’s On-Shelf QR Code Signage

13. Illustration 8-6: QR Replica Displayed by Dave’s Killer Bread
Illustration 8-7: Dole/Price Chopper Promotion Utilizing QSR Code Technology
Check-in Apps
Illustration 8-8: CheckPoints Mobile App Featuring Tyson Any’tizers
Harnessing the Power of Word-of-Mouth
In-Store Messaging Evolves with Technology
Direct Consumer Research
Illustration 8-9: Walmart Great Value Round Table Survey/Promo Feature
Illustration 8-10: Fresh & Easy Favorites Feedback Opt-in Email Program
In-Store Merchandising Trends
Smartphone App Helps Shoppers Navigate Meijer Supercenters
Carpeted Flooring?
New On-Site Food Equipment
“Clean Floor” Policies Limit Marketers’ Displays
Supervalu De-Cluttering In-Store Messaging
Appendix: Addresses of Selected Industry Associations and Retailers
Order Information
Online Download - $3,995.00
Global Site License - $6,000.00
Hard Copy Mail Delivery - $4,395.00
Online Download plus 1 Hard Copy - $4,795.00
Available immediately for Online Download at
http://www.marketresearch.com/product/display.asp?productid=2739666
US: 800.298.5699
UK +44.207.256.3920
Int'l: +1.240.747.3093
Fax: 240.747.3004