The Food Retail industry includes conventional convenience, gas station/kiosk, superette, conventional club, and military conveniences stores. Most products are divided in categories such as perishables, groceries, health and beauty care, general merchandise, and pharmaceutical. Many are further subcategorized, like perishables are subdivided into meats, fish and poultry, fresh produce, dairy, frozen foods, deli, baked goods, and floral.
Opportunities are available to label your own brand to reduce cost and sell more. Deflation on prices, due to an increase in competition, has driven sales low in the past quarters. Technology has also threaten some major players who haven’t invested, as others are ahead in the game.
The strategy, in the past 10 years, was to open new stores in new locations. But, due to the high competition of other players in the market, many are restraining from opening the number of new location for the next years.
Investor outside of United States have entered in the market to compete. LidI, a German supermarket, is expected to generate 21-27 billion in revenue in the next 5 years in the U.S, and open 1,000 more locations nationwide. Discount groceries has also threaten the major players by offering competitive prices and opening more stores every year.
Again, there are low barriers to entry and high profitability in the industry. Participants in the market operate in a highly competitive environment. The competing companies can vary in size from the big Fortune 500 companies to locally operating companies.
Mergers and Acquisitions characterizes the industry, with major players focused on strategic acquisitions and product development, eagerly buying smaller and innovative companies with specialties in growing niches.
Also, foreign investors are willing to enter into the market.
Justin Leo contributed to this report.