retail news in context, analysis with attitude

The New York Times reports on a trend that food retailers have been aware of for years - that traditional format boundaries are breaking down, and that more stores than ever are selling food as a way of building traffic and sales.

Here’s how the Times reports the story:

“Reflecting a major shift in the way Americans shop for food, retailers better known for selling clothes or aspirin, including Walgreens, CVS/Pharmacy and Target, are expanding in a big way into the grocery business, with fresh produce, frozen meats and, yes, even sushi.

“Target invested $500 million last year alone in a new push on groceries, retrofitting some of its general merchandise stores with full-blown food sections. Sales and traffic at stores with the new grocery areas are about 6 percent higher than at similar stores without them, the company says.

“Walgreens began making over some stores in Chicago and New York a year ago, and added up to 500 food items. CVS/Pharmacy last year redesigned about 200 of its stores in urban areas like Boston, Detroit and New York, and expects to make over about 20 percent of its 7,100 stores in all.

“As a result, people who typically went to the grocery store once a week to stock up are instead stopping by places whose food items used to be limited to a bag of chips or a can of soup. And retailers are viewing it as an opportunity to increase sales by getting people in their stores more frequently.”
KC's View:
What’s interesting about this story is the fact that with the exception of one quick mention - saying that Walmart generates around 30 percent of the US grocery business - the story doesn’t really address the fact that the Bentonville Behemoth really started this trend. Food retailers have known this for years, that nonfood retailers increasingly are using food to generate more sales and traffic. Traditional food retailers can use this as an advantage - while nonfood retailers use food to create traffic, people who know what they are talking about when it comes to food can use it to create magic.

And there’s a real difference.