Food store offerings make sense
WHAT IT MEANS AND WHY IT'S IMPORTANT You only have to look as far as a recent SymphonyIRI Group study to realize why a general gravitation toward expansion of food store offerings makes sense. Because it never matters much what the housing market is doing, how high unemployment is or how dire the economy is when you consider one simple common denominator: People still need to eat.
(THE NEWS: Target rolls out redesign, expanded food in stores in Tampa and Denver markets. For the full story, click here)
According to that SymphonyIRI Group study, released last Thursday, the food channel remained the predominant channel in terms of overall trips, enjoying a 98.4% household penetration over the 52 weeks ended June 27. Drug lagged behind that with only a 77% penetration; and mass, which is the sandbox in which Target plays, had only 71.6% penetration. And consumers today are shopping across fewer retailers, which suggests that a retailer positioned against both a value proposition and a convenience factor — where consumers only need to make that one trip to satisfy most of their shopping needs — may capture more than its fair share of future trips.
It’s not just the mass merchant Target that recently has identified expanded food offerings as a potential sales driver. Walgreens last week announced a move to bring healthier food choices to more inner-city residents with the introduction of an expanded food selection at its 67th St. and Stony Island location in Chicago. That store is 1-of-10 redesigned “oases” that serve urban centers identified as “food deserts,” or in other words, city neighborhoods that just don’t have a lot of healthy food choices within walking distance.
Also last week, Drug Store News reported CVS/pharmacy’s expansion of its Urban Cluster store concept, a store design that features a more prominent consumables department tailored to the consumer looking for a quick in-and-out shopping solution. The company expected to have 300 of its 7,100-plus stores converted to the concept by the end of the year, and expected to have a total of 1,300 to 1,400 stores reset to the concept over the next few years.
Both Walgreens and CVS/pharmacy are better positioned to capitalize on another learning out of that recent SymphonyIRI Group study: an increase in “quick-trip” shopping excursions. Total trips across all retailers have declined steadily since second quarter 2009, SymphonyIRI reported, with the exception of those “need-it-now” trips, which have remained steady since then and actually jumped dramatically in second quarter 2010. Similarly, basket size has declined most quarters since second quarter 2009, again, with the exception of those quick trips, which consistently have demonstrated increased basket size each quarter beginning third quarter 2009.