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Brick and mortar supermarkets continue to lose market share

Brick and mortar supermarkets continue to lose market share

According to research by Inmar Analytics, traditional supermarkets lost food retail market share to nontraditional grocery competitors and convenience stores in 2018. Last year supermarkets, fresh formats, limited-assortment stores, superwarehouses and small grocery stores saw sales drop 1.1%, lowering dollar share 1.7% year over year to 43.8%. In addition, the traditional supermarket store count fell by 0.5%.

On the other hand, in 2018 sales rose by 1.9% for wholesale clubs, supercenters, discounters, dollar stores and drug stores. The dollar share for these nontraditional grocery retailers rose 1.3% to 40% overall, and their store count rose by nearly 1%.

According to Inmar, sales totaled $1.25 trillion across all food retail formats in 2018, up 0.5% from the previous year. At the same time, overall store count was down 0.5%.

Inmar also stated in its report that the traditional grocery channel has lost more than half of its food retail market share since 1988, having dropped from 90% to 44%. Over the same time period, nontraditional grocery has gone from a 2% market share to 40%, and convenience stores from 8% to 16%.

“Traditional grocery stores can no longer expect to be successful by serving as CPG-supplied ingredient warehouses, enabling at-home meal preparation by stocking ubiquitous recipe requirements,” said Inmar Analytics Vice President Jim Hertel. “Seismic shifts in share within the $1.3 trillion food market are making that role increasingly untenable and unprofitable. The remaining pathway to growth is innovation.”