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Types of Food Retailers & Current Industry Shifts

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

From a conventional supermarket to a membership-based warehouse club, shopping at food retailers has never been easier. In this lesson, you'll learn more about the types of food retailers and the changes in the industry.

Shopping Options

Regina has three events coming up that she needs to shop for: a graduation party she is hosting, a quiet Saturday evening meal for her and her boyfriend, and a quick road trip with a girlfriend. Rather than shopping at one store, Regina has decided that she can make the best use of her time and money targeting each event with a specific kind of food retailer. Food retailers are places that consumers can buy food and take it off-site, compared to restaurants where food is consumed on-site.

Let's take a look at the different types of food retailers and see which will be the best fit for each of Regina's events.

Types of Food Retailers

1. Conventional supermarkets: Conventional supermarkets are your basic community grocery stores or supermarkets offering a range of food items, including produce, canned goods and meat, and a smaller, less robust amount of non-food items, such as school supplies or over-the-counter medications. Conventional supermarkets maintain low profit margins, relying on a large sales volume to earn a profit. Kroger, Sprouts, HEB and Whole Foods are names of conventional supermarkets you might recognize.

A conventional supermarket focuses primarily on food items and a smaller amount of general merchandise.
conventional, supermarket, grocery

A conventional supermarket would be a good choice for Regina's quiet weekend meal with her boyfriend, since she can get everything she needs to cook with in one quick trip.

2. Limited assortment supermarkets: Like its big brother, the conventional supermarket, the limited assortment supermarket offer food goods, but in reduced volume and at a lower price. This type of model offers a more efficient approach to the big supermarket and passes on the savings to its customers. Aldi and Save-A-Lot are the two most common limited assortment supermarkets available to shoppers in the U.S.

3. Supercenters: Supercenters are the ultimate in one-stop shopping, combining a full-sized grocery store or supermarket with a full-sized general merchandise store all under one roof. Consumers can take care of all their food needs here, as well as find housewares, auto products, toys and clothing. Walmart is the most popular supercenter in today's market, but other contenders include Meijer and even some Target stores. Supercenters do not require memberships for consumers to walk their aisles and make purchases.

4. Warehouse clubs: Where supercenters don't require a membership, warehouse clubs do. Stores like Sam's Club, Costco and BJ's Wholesale are warehouse clubs, which offer bulk shopping at reduced prices. True to its name, a warehouse club is housed in a space reminiscent of a traditional warehouse - very large, with products often displayed in the shipping boxes delivered by manufacturers.

For Regina, a warehouse club might be her best choice for the graduation party she is hosting, since she needs large quantities of different foods to accommodate her numerous guests.

5. Convenience stores: Convenience stores are small grab-and-go type establishments that you can find on the corner in many neighborhoods. When you think of convenience stores, you may think of a glorified gas station, because that's exactly what it is. A convenience store is typically attached to, or part of, a gas station, but may include a small assortment of food items such as bread, eggs and milk, as well as a host of other benefits like a coffee bar, snack shop and fountain drink station.

Popular convenience stores, a good choice for Regina's road trip with her girlfriend, include QuikTrip, 7-Eleven and Sheetz.

Convenience stores offer a small assortment of convenience products in a corner store atmosphere.
convenience, store

Food Retailer Industry Changes

In the past few decades, the food retailer market has shifted dramatically. What used to be simple, mom-and-pop type operations in small communities have been overtaken by the presence of larger, more centralized supercenters. But, limited assortment supermarkets are experiencing newfound popularity as consumers look to trim grocery costs and make more budget-friendly choices.

Perhaps the single biggest change to the food retailer landscape in the past few years can be summed up in one word: technology.

Today, technology has empowered shoppers more than ever before. Customers are able to search store shelves, compare prices, even order groceries for pick-up or delivery, all from the convenience of a smartphone or mobile device. Retailers are also embracing technology in the food space by marketing products and services such as curbside pick-up and digital coupons to their customers.

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