More types of stores selling groceries to lure customers



Soon, less than half of groceries will be sold in grocery stores, study says.
CINCINNATI (AP) -- When Roberta Mand needs groceries, she has a world of choices in her own backyard.
For regular shopping, she goes to her neighborhood Kroger Co. store. But for steaks, she prefers the Costco Wholesale Corp. store. For a pecan-encrusted tilapia to take home for dinner, she's off to The Fresh Market. And if she's hankering for sushi, she hits the Wild Oats Markets Inc. store a couple of minutes away.
"It just depends on what I'm looking for," said Mand, a married mother of two who works from her suburban home and typically cooks five nights a week. "I like variety."
These are spicy times for those who like variety in their grocery shopping choices, in price, selection and convenience. More retailers are using food to lure customers, intensifying competition while taking bites of the nearly 6,000 a year American households spend on groceries.
For most households, the days when nearly all grocery shopping was done weekly at a supermarket with a meticulously detailed list are fading into the past.
Now there are club stores to buy in bulk at discount prices, supercenters for combining grocery with clothes and other shopping, specialty stores for gourmet choices, and, for quick pickups of basic grocery items and snacks, not just convenience stores but expanded gas stations, drugstores, dollar stores and big-box retailers.
Some examples
A local shopper this week could go to the Sam's Club store to stock up on macaroni and cheese at 15 boxes for 7.76; or run into the Shell gas station to buy one box for 1.39.
Besides clothes and electronics, the Target store advertised four boxes of snack crackers for 7 total, barely half the grocery price. And a Kroger store sold a range of fare far beyond what would have been found in the supermarket a generation ago -- Chilean sea bass, Indian chutney, African-grown coffee; a whole "Nature's Market" section catering to the fast-growing organic foods market.
A recent annual industry report by Willard Bishop Consulting predicts that by 2010, less than half of what it projects as 1 trillion annual grocery and consumables sales will be in traditional grocers.
"Everybody in the world seems to be offering grocery items," said Jack Horst, grocery analyst for the Kurt Salmon Associates consulting firm
He expects the trend to grow: "Once I've got somebody in my store, whether I'm a CVS pharmacy or Ractrack convenience store, I want to make as much money from the customer as I can."
David B. Dillon, chief executive of Cincinnati-based Kroger, said the business is being transformed by "the fragmenting of where people buy groceries," and not just the emergence in the last two decades of discounter Wal-Mart Stores Inc. and of higher-end competitors such as Wild Oats and Whole Foods Markets Inc.
Traditional grocery stores
Kroger, the nation's largest traditional grocery store chain, has kept prices down overall while expanding its store formats. No-frills Food 4 Less discount stores operate in some markets and upscale Fresh Fare stores in others, with Marketplace stores -- double the typical size of Kroger stores and offering such nonfood goods as bedroom furniture, office supplies and jewelry -- in growing suburban areas in several states.
The leading traditional grocers also have been remodeling stores, expanding selections and improving service. Supervalu Inc. plans to spend 1.2 billion in the next year on remodeling and new stores. The big grocers and Wal-Mart have responded to growing demand by expanding organic and specialty food sections

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