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Global Food Retailing Industry

The world food retail market (one of the oldest sector of the global retail industry) is expected to witness slowing growth, maintaining a yearly rate of less than 6% between 2011 and 2016, according to MarketLine. The industry is forecast to generate revenue of almost $7 trillion by the close of 2016. Supermarket, hypermarket and discounters sales combined represented the most profitable segment in the world food retail market, generating almost $2.5 trillion in revenue for 2011 for over 45% of overall market value. 

Major obstacles facing food retail outfits include stiff competition, price wars and the rising market share held by private labels. Packaged Facts points to the need for food retailers to meet consumer demand for better prices relative to value. The fact that retail channels are becoming increasingly intermingled also points to changing consumer behavior and a retail marketplace that is undergoing transformation. There is also increasing pressure on food retailers to stay up-to-date on health and wellness issues to go beyond offering food and venture into offering consumers nutrition management services.

Other trends currently evident in the global food retailing industry include use of digital technology and internet marketing. Food retailers have to be very reactive to constant changes in consumer behavior to attract customers and offer them appropriate packaged goods at prices they are willing to pay. 

Key Market Segments

Food and groceries represent a huge portion of the goods sold through supermarkets, reports Global Industry Analysts. Inventory stocking prevails in developed nations in particular, where consumers look to supermarkets as bodies ensuring food quality and safety. Leading retailers have been forced to come up with innovative strategies to deal with the rising rate of competition in the food retailing sector. Such strategies include non-conventional services and home meal replacements, and help to set large-scale retailers apart from restaurants and grocery outlets. Grocery stores in turn are battling market rivalry by consolidating their market presence through additional services like home delivery. Other efforts on the part of large-scale grocery stores to attract new customers and retain existing customers while boosting profits include conveniences like in-store pharmacies.

Online grocery stores represent an area of huge potential growth in the grocery retail market. Retailers can sell their grocery products directly through the internet, capitalizing on newer trends in consumer behavior and affording the consumer the utmost of ease and convenience. Online grocery shopping is proving a particularly big hit with consumers in the US, France and the UK. Leading names in the grocery retail market are concentrating a good deal of their efforts on providing high quality online services and promoting this retail channel through specific marketing strategies.

Regional Market Share

Around 66% of grocery shoppers in the US have bought food or beverage products in recent times in an effort to deal with a health and wellness issue, reports Packaged Facts. Digestive health and cholesterol management are two high-ranking health concerns. Consumers are ready to pay more for grocery products deemed to be of higher quality or to address specific health issues.

The EU food retail market was worth almost $1.8 trillion in 2011, having recorded close to 5% yearly growth for the four preceding years, reports MarketLine. Supermarkets, hypermarkets and discounters represented the most profitable segment of the EU food retail industry in 2011, exceeding $920 billion and accounting for almost 52% of overall industry value. Market growth is expected to accelerate to a yearly rate of just over 5% between 2011 and 2016, bringing the industry to almost $3 trillion by 2016. The EU food retail market represents around 33% of the overall world market, reports MarketLine.

MarketLine estimates China’s food retail industry was worth almost $452 billion in 2011 after maintaining annual growth of 6% between 2007 and 2011. Convenience and gas station sales generated the highest profit in 2011 at almost $255 billion, accounting for more than 55% of market value. The industry is expected to witness slowed growth, remaining at a yearly rate of less than 6% between 2011 and 2016. China’s food retail industry is forecast to generate revenue of $590 billion in 2016.

Food retail represented a $345 billion industry in India in 2011, according to MarketLine. The market witnessed yearly growth in excess of 11% for the four-year period ending 2011, with convenience store and gas station sales representing the leading segment at almost $220 billion for more than 63% of the overall market. The food retail industry in India is expected to see growth slow to 10.5% a year over the five-year period ending 2016. The industry is forecast to exceed $570 billion in 2016.

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Parent industry: Retail
Related industries: Department Store, Discount Store, Catalog and Mail Order, Specialty Store, Wholesaling, Supermarket and Hypermarket, E-Commerce

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