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    Sales Growth for Grocery Retailers Not Expected to Keep Pace with Inflation: Report

    CHICAGO -- Growth rates for six retail formats -- including supermarkets -- aren't expected to keep pace with inflation for the remainder of this decade, consulting group Willard Bishop here revealed during "The Future of Food Retailing" Webinar sponsored by The Food Institute.

    CHICAGO -- Growth rates for six retail formats -- including supermarkets -- aren't expected to keep pace with inflation for the remainder of this decade, consulting group Willard Bishop here revealed during "The Future of Food Retailing" Webinar sponsored by The Food Institute.

    The six types of formats include four grocery retail formats, convenience stores that sell gas, and military outlets. While it's not anticipated that mass retailers will experience any real growth, fresh format stores, limited-assortment stores, supercenters, and dollar stores will post the greatest gains vs. inflation by 2010, Willard Bishop predicts.

    "This is a conservative estimate, given that rising energy prices could push the inflation rate even higher," noted Jim Hertel, s.v.p. of Willard Bishop, during the Webinar.

    Willard Bishop's annual "Future of Food Retailing Report," which was also presented during the Webinar, reveals even further market share erosion for traditional grocery formats. Total traditional grocery market share for 2005 was 50.4 percent, while the market share for nontraditional grocery outlets reached 33.4 percent. Convenience store market share for 2005 was 16.2 percent.

    By 2010, traditional grocery share is projected to decline to 44.1 percent, while nontraditional grocery share is projected to increase to 40.5 percent. And while convenience store sales will continue to rise, this format isn't expected to keep pace with the growth of other retail formats, and is projected to have a 15.4 percent market share by 2010.

    Both Jim Hertel and Bill Bishop, founder of consultancy Willard Bishop, underscored the need for immediate action by manufacturers and retailers. "Manufacturers need to embrace the changes that are taking place in food retailing today, in order to succeed over the long term," observed Hertel. "Even if new and emerging formats aren't right for your products, these are the types of stores where Americans are increasingly purchasing their food and consumables."

    Bishop cautioned: "The key takeaway for retailers is that there's real risk in falling behind in efforts to satisfy shopper needs. Sales are shifting more rapidly than ever before among stores, and the growth is going to the most innovative retailers."

    To get a copy of "The Future of Food Retailing" visit www.willardbishop.com., click on "Press," and then click on "The Future of Food Retailing."

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