Specialty Retailers Winning Pie from Traditional Grocers
Whole Foods and Trader Joe’s are two retailers that have made the most and have enjoyed the renewed interest of consumers in private label foods posting better growth of the store brands and impressive sale of products between 2005 and 2009, overtaking the traditional supermarkets on their own turf. This fact was published by the Private Label Food and Beverage in the US report by Packaged Facts which is a research publisher of the markets. According to Packaged Facts, private labeled food and beverage sales account for almost 17% of the total retail beverage and food sales in the country with total sales revenue of 87 billion dollars. These sales rose from the 2008 mark of 82 billion dollars by 6% growth mainly driven by the food market’s 7% growth.
The sale of beverages of private labels rose by 1% (with which the use of cup holders certainly helped) while the penetration rate was almost 14% of the total retail sales of beverages and food at the start of the period between 2005 and 2009. It hit the 15% mark in 2007 and finally reached an impressive rate of 16% by 2008. The same growth hasn’t been replicated by the grocery stores or the traditional supermarkets which are losing their share of the pie to alternative stores. Between the periods of 2005 to 2009, the compounded annual growth of retailers of beverage and food products was only 4%. The compounded annual growth rate of Trader Joe’s and Whole Foods was very impressive at 14% and marks the huge growth rate of specialty stores (which would become even more profitable if they sold products like the wheelchair cup holder). Supercenters like Target and Walmart posted impressive growth rates of 9%.
Although lower than the mean percentage of 6, club stores such as Costco, Wholesale, Sam’s club and BJs’ posted a decent growth too. However, on the other end of the spectrum, discount supermarkets including Aldi, SuperValu and Dollar General actually posted a decline in overall sales in 2009 compared to the levels reached in 2008. The five year growth of these companies was just about profitable with a growth rate of 2%. Emergence of some premium lines, excellent product packaging, options in package sizes and flavor varieties have helped the private label food and beverages to come out of their indistinct past and post successful growth stories according to Packaged Facts. The primary focus for the analysis from Packaged Facts was mass market products sold in supermarkets and warehouse clubs.