IDDBA's What's in Store 2010 Reports Shopping Venue Trends

NEWS FROM IDDBA For Immediate Release For more information, contact Jessica Hughes E-mail: jhughes@iddba.org; Phone: 608.310.5000 January 5, 2010

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Madison, WI — Over the past few years, several food retail formats have gained consumers who shifted their purchases from one format to another—but these gains were negated by the fact that shoppers overall purchased far fewer goods than in the previous year. According to What's in Store 2010, the trends report from the International Dairy-Deli-Bakery Association™ (IDDBA), non-traditional grocery formats (including wholesale clubs and supercenters) have become bigger players as consumers change their shopping habits.

Supermarkets
The traditional supermarket's dollar share of consumer food expenditure dropped slightly in 2008, despite increased dollar sales. IDDBA research found that the consumers most likely to shop frequently at traditional supermarkets are more often male, white or Asian/Pacific American, older than 45, and consider themselves "very financially secure." Smaller stores that offer a limited assortment and are easier for customers to navigate are an important trend.

Supercenters
Supercenters are one of the go-to formats (along with limited-assortment stores and club stores) as consumers look to stretch their food dollars. IDDBA's 2009 report The New Value Shopper reveals that consumers most likely to shop frequently at discount supercenters are slightly more often female, under age 45, and Hispanic/Latino American. They are having a difficult time financially, despite incomes ranging from $25,000 to $74,999 annually.

Convenience Stores
At the end of 2008, there were 144,875 convenience stores in the United States—a drop from the previous year that was the result of high gas prices and the recessionary economy, according to the National Association of Convenience Stores. But profits rose and foodservice sales remained strong, accounting for almost 14 percent of in-store sales. IDDBA original research reveals a disparity in the convenience store customer's financial security. Large shares of convenience store customers describe themselves as either having a hard time financially or being very financially secure.

Club Stores
Club stores, also called wholesale clubs, sell only to members who join for a fee. They are hybrids of discount retail superstores and wholesale warehouses. Sales increased significantly in 2008 and are expected to continue growing strong for several years. According to IDDBA research, consumers most likely to shop frequently at club stores are more often male, under the age of 35, and Hispanic/Latino American or Asian/Pacific American. They have incomes higher than $50,000 annually and consider themselves financially secure.

Dollar Stores
The dollar store format has benefitted from consumers economizing. Sales growth for the major players (Dollar General, Dollar Tree, and Family Dollar) is strong. Analysis by CoStar Group Inc. regarding new retail store openings planned for 2009 found several dollar store chains near the top of the list for number of planned new outlets. Consumers are increasingly turning to dollar store for consumables—food, health & beauty aids, household products, and pet food—and dollar stores are adding refrigerated and frozen cases.

Online Shopping
While Internet retailing is growing, only 1% to 2% of all groceries are bought online. Several forward-thinking food retailers and businesses experimented with online shopping, but some have discontinued that section of their business. Operational difficulties of online food retailing include narrow margin, delivery charges and fuel surcharges, product volume management, frequent price changes, and the perishable nature of some merchandise. Several successful online retailers have tweaked the business model to provide success.

Meal Assembly Centers
According to the trade group Easy Meal Prep Association, 1,400 meal assembly centers will bring in $410 million in 2008. But meal assembly centers are expanding their concept from a do-it-yourself kitchen where customers can prepare from-scratch meals quickly from premeasured ingredients. Centers are starting to deliver meals pre-assembled by staff to homes and work sites and are offering pre-assembled frozen and refrigerated meals for pick up. Some supermarkets have responded to the meal assembly center trend by opening such businesses inside their stores.

Restaurants
The restaurant business continues to be depressed and, as of early 2009, the outlook remains challenging. Consumers are cutting back on restaurant visits or trading down within the restaurant category by switching from full-service to quick-service, for example. In response, restaurant operators are flooding consumers with special deals.

What's in Store 2010 details consumer and industry trends affecting the dairy case, cheese case, bakery, deli, and foodservice supermarket departments. Its 165 tables, developed in cooperation with leading industry firms and associations, include department sales, per capita consumption, consumer preferences, and random-weight, UPC, and private label sales data. The full report is available from IDDBA. The cost is $99 for IDDBA members and $399 for non-members, plus shipping and handling. Purchasers of the report also gain on-line access to quarterly random weight sales data throughout the year. For more information, or to order, call the IDDBA Education Department at 608-310-5000 or visit the organization's Web site, www.iddba.org.

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Information on IDDBA's research, education, and other industry activities is also available on its Web site, www.iddba.org, or by calling 608.310.5000. Now in its 46th year, IDDBA specializes in promoting the dairy, deli, cheese, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and computer-based training programs, management tools, an annual trends report, and a member directory of key industry contacts.