Mariah Guiswite Policy-Holobetz<\/p>\n
SPRING 2021 POLICY WORKSHEET 1 ON INDUSTRY CHARACTERISTICS _________Grade<\/p>\n
Industry Characteristics (Describe your Industry in detail). <\/p>\n
The food & grocery retail market includes the retail sales of all food products, both packaged and unpackaged, as well as beverages (including retail sales of all alcoholic and non-alcoholic beverages), tobacco, and household products. All on-trade sales of food and beverage are excluded (MarketLine Industry Profile, 2020). In other words, retail food is all food, other than restaurant food, that is purchased by consumers and consumed off-premise. Retail food comes in all shapes and sizes and is protected by numerous government agencies.<\/p>\n
Retail food is one of man’s most important expenditures because people need to eat to live healthy lives. Most people purchase retail food items every week, including meat, vegetables, fruit, milk, bread, eggs, snacks and many other items. Retail food has high demand elasticity; regardless of the state of the economy, there will be a fairly consistent need for retail food products (Chron Contributor, 2020).<\/p>\n
https:\/\/advantage.marketline.com\/Analysis\/ViewasPDF\/global-food-grocery-retail-94867<\/p>\n
file:\/\/\/C:\/Users\/Mariah\/Documents\/global-food-grocery-retail-94867.pdf<\/p>\n
https:\/\/smallbusiness.chron.com\/meaning-retail-food-17255.html<\/p>\n
Industry size (How large is your industry, include total domestic sales, global sales and total employees).<\/p>\n
In the United States, retail and food services sales amounted to 6.2 trillion U.S. dollars in 2019, increasing for the tenth successive year. The total number of supermarkets in the U.S. has remained around 38,000 for several years and fell as 38,307 in 2018. There are an estimated 4.8 million people employed in the Supermarkets & Grocery Stores industry in the US as of 2021 Supermarket food sales hit an estimated 447 billion U.S. dollars in 2018, which accounted for nearly 60 percent of the U.S. retail grocery market. <\/p>\n
https:\/\/www.ibisworld.com\/industry-statistics\/employment\/supermarkets-grocery-stores-united-states\/<\/p>\n
https:\/\/www.fmi.org\/our-research\/supermarket-facts<\/p>\n
The global food and grocery retail market size was valued at USD 11.7 trillion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.0% from 2020 to 2027. For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,Middle East, South Africa and Nigeria (MarketLine Industry Profile, 2020).<\/p>\n
I could not locate the total number of people employeed in the industry, but based upon the United States numbers, I estimate it to be around 7.1 million. <\/p>\n
(6.2\/11.7)=52%, 4.8 million * 1.48= 7.1 million<\/p>\n
https:\/\/www.statista.com\/topics\/1660\/food-retail\/<\/p>\n
Market share of top competitors in your industry (Include domestic and global competitors, minimum of 5 each) need two separate pie charts for domestic and global. Show both revenue figures and percentage of market in for each company.<\/p>\n
United States Market:<\/p>\n
1. WALMART INC.<\/p>\n
Grocery Sales: $288 billion from 4,253 stores. (Walmart\u2019s & Sam\u2019s Club total revenues in 2019 were over $514 billion and grocery now accounts for 56% of their sales.<\/p>\n
2. THE KROGER CO.<\/p>\n
Revenues of about $121 billion across its 2,759 stores operating under the Kroger, Harris Teeter and Smith\u2019s banners<\/p>\n
3. ALBERTSONS COS. INC.<\/p>\n
Revenues near $61 billion across its 2,323 stores operating under the Safeway, Albertsons, and Vons grocery banners.<\/p>\n
4. AHOLD DELHAIZE USA<\/p>\n
Revenues were more than $44 billion across 1,963 supermarkets operating under its Food Lion, Stop & Shop and Hannaford banners.<\/p>\n
5. PUBLIX SUPER MARKETS INC.<\/p>\n
$36 billion in revenues at 1,236 stores locations in Alabama (76), Florida (805), Georgia (187), North Carolina (45), South Carolina (62), Tennessee (46) and Virginia (15)<\/p>\n
https:\/\/www.foodindustry.com\/articles\/top-10-grocers-in-the-united-states-2019\/<\/p>\n
https:\/\/www.statista.com\/statistics\/818602\/online-and-offline-grocery-market-share-of-leading-grocery-retailers-us\/<\/p>\n
5. Schwartz Gruppe-1.0% market share<\/p>\n
In-store net sales for 2019: $117 billion<\/p>\n
Estimated in-store net sales for 2024: $145 billion<\/p>\n
Estimated online net sales for 2024: $3 billion<\/p>\n
4. Kroger-1.02% market share<\/p>\n
In-store net sales for 2019: $119 billion<\/p>\n
Estimated in-store net sales for 2024: $135 billion<\/p>\n
Estimated online net sales for 2024: $9 billion<\/p>\n
3. 7-Eleven Holdings-1.03% market share<\/p>\n
In-store net sales for 2019: $120 billion<\/p>\n
Estimated in-store net sales for 2024: $168 billion<\/p>\n
2. Costco-1.29% market share<\/p>\n
In-store net sales for 2019: $151 billion<\/p>\n
Online net sales for 2019: $7 billion<\/p>\n
Estimated in-store net sales for 2024: $201 billion<\/p>\n
Estimated online net sales for 2024: $12 billion<\/p>\n
1. Walmart- 4.3% market share<\/p>\n
In-store net sales for 2019: $503 billion<\/p>\n
Online net sales for 2019: $49 billion<\/p>\n
Estimated in-store net sales for 2024: $568 billion<\/p>\n
Estimated online net sales for 2024: $110 billion<\/p>\n
I could not locate the market shares, but I calculated them based upon the estimated $11.7 trillion value of the global food retail market. I did this by taking the net sales\/$11.7 trillion.<\/p>\n
https:\/\/www.canadiangrocer.com\/top-stories\/the-10-largest-food-retailers-in-the-world-by-sales-89478<\/p>\n
Financial ratios of industry ( minimum of 8 ratios of relevance to industry including price earnings ratio) on chart. Numbers for 5 years running with most recent year 2019\/2020, annual numbers only.<\/p>\n
Activity Ratios:<\/p>\n
Inventory Turnover: COGS\/Avg Inventory<\/p>\n
Asset Turnover<\/p>\n
Receivables Turnover<\/p>\n
Days Sales in Receivables<\/p>\n
Liquidity Ratios:<\/p>\n
Current: CA\/CL<\/p>\n
Profitability Ratios:<\/p>\n
Gross Profit Margin: (Net Sales-COGS)\/Net Sales<\/p>\n
Return on Equity (ROE)<\/p>\n
Return on Assets (ROA)<\/p>\n
Return on Investment (ROI)<\/p>\n
Operating Margin<\/p>\n
Price Earnings<\/p>\n
EBIT Margin<\/p>\n
EBITDA Margin<\/p>\n
Other:<\/p>\n
LT Debt\/Capital<\/p>\n
Debt\/Equity<\/p>\n
https:\/\/www.macrotrends.net\/stocks\/charts\/KR\/kroger\/financial-ratios<\/p>\n
https:\/\/www.macrotrends.net\/stocks\/charts\/TSCDY\/tesco\/financial-ratios<\/p>\n
The Kroger Company:<\/p>\n
Tesco<\/p>\n
List and explain 5. List at least 3 of your industry\u2019s primary Key success factors (main things customers need and want)?<\/p>\n
Keeping up with changing trends, innovation-Modern store experience: In today\u2019s world, consumers are becoming more reliant upon modern technology and the affects it has on the food retail space. Ominichanel shoppers, those that shop online, have different expectations. They want something that goes way beyond just groceries. With this being said, in order for grocers to remain competitive, they must keep up to trend with technological developments. In today\u2019s world this means digital coupons or club cards, online shopping, curbside pickup, or even delivery. In addition, shoppers appreciate in-store price checkers and self-check out machines within their grocery stores.<\/p>\n
\u201cFor grocers to survive, and thrive, they must evolve the store experience to meet the modern shoppers\u2019 expectations, which have been strongly influenced by e-commerce in recent years,\u201d Buiocchi says.<\/p>\n
HRC Retail Advisory conducted their survey of 2,900 Canadian and US consumers to better understand what drives shoppers into stores. The results from this survey found 85 percent of shoppers to prefer using in-store price scanners over asking a sales associate for the price of an item. In addition, 76 percent of the participants said that they would like to see more in-store apps that can provide product information and recommendations.<\/p>\n
About 34 percent of respondents put importance on receiving promotional and sales information directly to their smartphones. Social media was also found to be a significant factor in the purchasing decisions of shoppers, with 70 percent of Gen Z and 63 percent of millennials claiming to consult the social media shares of their friends and family members to gather opinions on products before purchasing them.<\/p>\n
https:\/\/xtalks.com\/consumer-reports-find-shoppers-prefer-in-store-technology-over-employees-1244\/<\/p>\n
Good store experience: The emergence of digital technology and ecommerce in the grocery retail space has change customers expectations around what the in-store grocery store experience should be, but it hasn\u2019t actually changed much about the way and where consumers ultimately decide to shop. For that, the store experience is what really counts. A good store experience consists of a variety of factors: Convenience, Range of choice, availability of products, customer service: Consumers are increasingly beginning to value convenience when it comes to their shopping experience. Therefore, grocers that make the experience convenient and multi-faceted will capture customer loyalty. In addition, as always customers expect a good store experience in which the shelves are stocked with the products they are looking for. In addition, they want friendly and knowledgeable employees that are available to help if need be.<\/p>\n
\u201cGrocers can no longer simply provide a place to buy food and household products. Instead, they should consider a shopping experience that is unique and differentiated from the one-dimensional, transactional and non-sensory nature of online grocery shopping, with experiences, services and amenities that only brick-and-mortar grocers can provide,\u201d he continues.<\/p>\n
While it seems that online ordering, pickup, and home delivery are the most important innovations in grocery retail since Piggly Wiggly\u2019s Clarence Saunders invented the self-service grocery store in 1916, customers by far prefer to do their grocery shopping the old-fashioned way: in a store.<\/p>\n
Some 66% of the 1,505 recent grocery shoppers surveyed by ServiceChannel in their \u201cState of Grocery Report,\u201d and who are also the household\u2019s primary purchasers, said they actually enjoy grocery shopping most or all of the time.<\/p>\n
Grocery shoppers expect clean floors, bathrooms and carts as well as clean and well-organized shelves. Sadly, over one-third of shoppers report that a grocery store they recently visited didn\u2019t measure up to those standards.<\/p>\n
In addition, customers want a timely shopping and check-out experience, they do not want to have to wait in lines.<\/p>\n
In addition to the current key personnel that maintain today\u2019s retail establishments, stores of the future will have a more specialized and highly skilled workforce such as health experts (including dietitians, nutritionists and macrobiotic experts); in-store chefs and food prep experts; and shopping guides.<\/p>\n
\u201cA strong focus on quality, freshness, customer service and a unique shopping experience are key elements that are shaping the path for a competitive playground among traditional grocers,\u201d he says.<\/p>\n
https:\/\/progressivegrocer.com\/experience-crucial-grocery-store-future<\/p>\n
Value<\/p>\n
Consumers want to receive the highest value for their money when doing their normal shopping. This involves getting the highest quality products: meats, fruits, vegetables, for the lowest possible prices. Paired with the shopping experience discussed above, this is how customers choose where to shop and how stores ultimately obtain their competitive advantage. Customers that feel as though they are receiving a good value are more likely to continue shopping at that store<\/p>\n
Price is the most important thing for shoppers that are not high-income.<\/p>\n
For the third year in a row, price and quality remain the two most important customer needs that retailers must meet. Together, these form the core of value perception. They have the largest effect on retailer financial performance and customers\u2019 emotional bond with retailers.<\/p>\n
Price is the more important half of the value core for shoppers of almost all incomes. The top five grocery stores for price are Aldi, Market Basket, WinCo, Lidl and Trader Joe\u2019s. It isn\u2019t until annual household incomes reach $200,000 that customers will generally favor quality in the value core. Also, price-first retailers have grown twice as fast as quality-first retailers over the past five years, with Aldi and the big dollar chains growing faster than almost any retailer measured.<\/p>\n
https:\/\/www.foodnavigator-usa.com\/Article\/2019\/02\/01\/Where-do-supermarkets-stand-on-consumer-satisfaction-Value-for-money-spent-top-of-mind-for-shoppers-says-RFG<\/p>\n
https:\/\/www.cspdailynews.com\/general-merchandise\/grocery-stores-winning-over-consumers-relevance-convenience-value<\/p>\n
Overall, what separates the winners, like H-E-B, Wegmans, Market Basket, Publix, ShopRite, and WinCo from the losers in the Dunnhumby study is they have optimized their customers\u2019 value perception with fair prices, high-quality products (including private label), wide assortments, and fresh produce and meats. They also offer prepared foods and a store experience that delights, not disappoints, which brings us back to the ServiceChannel study.<\/p>\n
https:\/\/www.forbes.com\/sites\/pamdanziger\/2020\/02\/16\/traditional-grocery-retailers-are-winning-back-customers-and-not-because-of-online-order-pickup-or-delivery\/?sh=4720c4444903<\/p>\n
Describe the current effects that COVID 19 is having on your industry. Be as specific with both positive and\/or negative consequences.<\/p>\n
https:\/\/www.grandviewresearch.com\/industry-analysis\/food-grocery-retail-market#:~:text=Theglobalfoodandgrocery,5.0from2020to2027<\/p>\n
https:\/\/www.supermarketnews.com\/center-store\/how-coronavirus-crisis-changing-grocery-shopping.<\/p>\n
Increased Demand leading to increased spending<\/p>\n
With the close of many restaurants and health concerns, consumers have turned to preparing their own meals, leading to an increased demand and spending in grocery stores. This increased demand and unnecessary stockpiling by many consumers has led to difficulty finding many necessary food and household items.<\/p>\n
Of those polled, 75% reported difficulty finding chicken and other meats, with other hard-to-find foods including bread (31%), eggs (29%) and milk (25%). The top beverages stockpiled were milk (48%), coffee (44%), bottled water (34%) and soda (23%). Twenty-three percent of consumers stocked up on wine, 18% on beer and 18% on spirits.<\/p>\n
Consumers reported cooking an average of six dinners at home over the previous seven days, compared with 3.8 weekly home-cooked dinners in a 2018 eMeals survey. <\/p>\n
As a result, key retail suppliers have started hiring workers to keep up with the demand. For instance, Walmart, Amazon, Dollar General, CVS, and Albertsons are hiring 150,000, 100,000, 50,000, 50,000, and 30,000 employees respectively to serve the consumers.<\/p>\n
In March 2020 alone, Kroger posted 12,798 unique job postings.<\/p>\n
https:\/\/www.economicmodeling.com\/2020\/04\/21\/covid19-impact-on-grocery-stores\/<\/p>\n
Supply Disruptions\/Shortages<\/p>\n
As a result of the COVID pandemic and increased demand for grocery store products, grocery stores are having supply difficulties. Many stores are either unable to get their desired products or can not keep up with the increased demand.<\/p>\n
In Shopkick\u2019s survey, almost all respondents encountered out-of-stocks of household essentials at their preferred retailer or grocery store as consumers nationwide rushed to stock up amid the coronavirus outbreak. These items included toilet paper (cited by 97% of shoppers polled), hand sanitizer (93%), disinfecting wipes (91%), bottled water (69%), medical products (64%) and canned goods (54%).<\/p>\n
Shoppers weren\u2019t able to find 40% of the grocery items on their shopping list between March 18 and 23, even after visiting an average of two grocery stores, according to a survey of more than 3,000 consumers by meal planning service eMeals.<\/p>\n
Of those polled, 75% reported difficulty finding chicken and other meats, with other hard-to-find foods including bread (31%), eggs (29%) and milk (25%). The top beverages stockpiled were milk (48%), coffee (44%), bottled water (34%) and soda (23%). Twenty-three percent of consumers stocked up on wine, 18% on beer and 18% on spirits.<\/p>\n
Buying Restrictions <\/p>\n
In order to lessen the effects of the supply shortages, grocery stores are forced to implement buying restrictions on essential goods. These are most commonly found on paper and cleaning products like paper towels, toilet paper, paper plates, kitchen\/bathroom cleaner, etc. It is common for customers to only be able to purchase one or two of these items within a particular shopping trip.<\/p>\n
Seventy-eight percent also reported purchase restrictions, including limits on the number of specific items customers could buy.<\/p>\n
Increased Revenues<\/p>\n
The grocery store industry is one of the few retail industries that greatly benefit from the pandemic. The increased demand for food retail items lead to higher consumer spending than ever on grocery products. <\/p>\n
Average grocery spending for the week of March 18-23 came in at $253, up 55% over respondents\u2019 normal weekly purchases, eMeals said. And shoppers acknowledged spending more than usual. Thirteen percent spent $400 or more, and just 1% said their grocery bill is that high in a typical week.<\/p>\n
Grocery stores and supermarkets in most states were up 20% to 50%<\/p>\n
Only five states saw a decrease in year-over-year sales during this period<\/p>\n
Sales nearly double on February 10 and 11, corresponding with the news that the global death toll for coronavirus had topped 1,000<\/p>\n
U.S. sales in March have been up 20% to 30% nearly every day, with the mounting gains on the week of March 8, when much of the country started shutting down<\/p>\n
Sales then spiked dramatically the weekend of March 13 after major announcements like the NBA suspending its season and several states closing schools<\/p>\n
Grocery stores across the country saw a 100% increase in revenue on March 16<\/p>\n
Furthermore, the revenue of vendors has jumped up remarkably in the first quarter of 2020. The Kroger Co has announced a 30% increase in identical-store sales in March. The panicked shoppers have been emptying the shelves and putting pressure on the available store staff. <\/p>\n
Increased Reliance on Technology\/Online Shopping<\/p>\n
Consumers with health concerns amid the pandemic are turning to other forms of grocery shopping, particularly online. This has led to an increased reliance on technology, as many of the major grocers have been forced to create online shopping platforms.<\/p>\n
Services like delivery and curbside pickup have increased in demand.<\/p>\n
COVID-19 is also changing the way American consumers shop for groceries. Online grocery shopping has exploded, sending downloads for grocery pickup apps like Walmart\u2019s through the roof. Grocery delivery company Instacart is also working to meet increased demand, posting over 3,700 jobs in the last 30 days (a 120% increase).<\/p>\n
Of more than 300 U.S. consumers polled, 78.7% reported shopping online for groceries after the COVID-19 outbreak, up 39% from before the pandemic, said Winston-Salem, N.C.-based Inmar, which provides data analytics and technology solutions for retailers and manufacturers. What\u2019s more, 56.7% of respondents said they shop for groceries online more often now than before the pandemic.<\/p>\n
39% chose a retailer based on whether it had a grocery pickup or delivery time slot available in the desired window.<\/p>\n
Inmar\u2019s survey findings underscored the importance of those experiences in the omnichannel age, as consumers shift their grocery shopping venues. Of those polled, 51.4% reported buying groceries from Amazon since the start of the pandemic, up 32% from before the outbreak. Likewise, brand manufacturers saw a 117% surge in direct-to-consumer grocery sales after the onset of COVID-19, while online grocery stores saw a 48% increase.<\/p>\n
https:\/\/www.supermarketnews.com\/online-retail\/nearly-80-us-consumers-shopped-online-groceries-covid-19-outbreak<\/p>\n","protected":false},"excerpt":{"rendered":"
Mariah Guiswite Policy-Holobetz SPRING 2021 POLICY WORKSHEET 1 ON INDUSTRY CHARACTERISTICS _________Grade Industry Characteristics (Describe your Industry in detail). The food & grocery retail market includes the retail sales of all food products, both packaged and unpackaged, as well as beverages (including retail sales of all alcoholic and non-alcoholic beverages), tobacco, and household products. All […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-78265","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/78265","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=78265"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/78265\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=78265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=78265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=78265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}