Saving the Grocery Store

Since Friday is now our ususal grocery shopping day, I thought that posting a link to this article would be appropriate. Although it's about one small US grocery chain, there's enough information in the article about the grocery industry, to make it a worthwhile read for anyone who's interested in where they get their food. I found it completely fascinating.

A cursory glance might suggest grocery stores are in no immediate danger. According to the data analytics company Inmar, traditional supermarkets still have a 44.6 percent market share among brick-and-mortar food retailers. And though a spate of bankruptcies has recently hit the news, there are actually more grocery stores today than there were in 2005. Compared to many industries — internet service, for example — the grocery industry is still a diverse, highly varied ecosystem. Forty-three percent of grocery companies have fewer than four stores, according to a recent USDA report. These independent stores sold 11 percent of the nation’s groceries in 2015, a larger collective market share than successful chains like Albertson’s (4.5 percent), Publix (2.25 percent), and Whole Foods (1.2 percent).

But looking at this snapshot without context is misleading — a little like saying that the earth can’t be warming because it’s snowing outside. Not long ago, grocery stores sold the vast majority of the food that was prepared and eaten at home — about 90 percent in 1988, according to Inmar. Today, their market share has fallen by more than half, even as groceries represent a diminished proportion of overall food sold. Their slice of the pie is steadily shrinking, as is the pie itself.

By 2025, the thinking goes, most Americans will rarely enter a grocery store. That’s according to a report called “Surviving the Brave New World of Food Retailing,” published by the Coca-Cola Retailing Research Council — a think tank sponsored by the soft drink giant to help retailers prepare for major changes. The report describes a retail marketplace in the throes of massive change, where supermarkets as we know them are functionally obsolete. Disposables and nonperishables, from paper towels to laundry detergent and peanut butter, will replenish themselves automatically, thanks to smart-home sensors that reorder when supplies are low. Online recipes from publishers like Epicurious will sync directly to digital shopping carts operated by e-retailers like Amazon. Impulse buys and last-minute errands will be fulfilled via Instacart and whisked over in self-driving Ubers. In other words, food — for the most part — will be controlled by a small handful of powerful tech companies.

I should note that the article is extensively hyperlinked to much background information; for example, how it's expensive for Costco to open new stores and why they keep doing it.