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    Supermarkets Move to Specialty Services: FMI Study

    WASHINGTON -- Faced with stiff competition, food retailers are making an effort to stand out from the crowd by rolling out target market-focused stores, and offering more specialty services, according to "Facts About Store Development 2005," the Food Marketing Institute study released yesterday.

    WASHINGTON -- Faced with stiff competition, food retailers are making an effort to stand out from the crowd by rolling out target market-focused stores, and offering more specialty services, according to "Facts About Store Development 2005," the Food Marketing Institute study released yesterday.

    "Shifting consumer behaviors and attitudes, shorter product lifecycles, new store concepts and competitive pressures from a broad range of retail formats are driving a fundamental change in the way food retail companies do business," noted FMI s.v.p. Michael Sansolo in a statement. "There is no longer a 'one format fits all' supermarket. Understanding the specific needs of your targeted consumers and delivering what they need are essential for success."

    Retailers polled for the report said they are extremely interested in developing niche concepts as a way to attract and retain consumers, as well as broaden market share. They're testing a range of formats, with some retailers even providing several store types in the same market. The most popular format is gourmet/specialty, offered by 66.7 percent of companies, followed by natural/organic (50 percent), and ethnic (25 percent).

    Notable trends outlined in the report include the following:

    --Space for cooking demonstrations is offered by 72 percent of new stores, as consumers with less cooking experience who seek to enlarge their range of skills increasingly view cooking as a special event.

    --Over half (53.7 percent) of the companies surveyed have a coffee bar in at least one store, and slightly fewer (52.2 percent) have introduced dollar aisles, addressing consumers' dual desires for convenience and value.

    --In-store pharmacies continue to be a popular feature, at 55.7 percent of responding companies. Besides serving as a cornerstone for consumer health-and-wellness programs, they've become central in the marketing of HBC products.

    --One-fourth (25.4 percent) of retailers polled offer gasoline, and almost one in five (18.3 percent) feature a conveniently located "quick stop" area where shoppers can buy household staples and quick meals.

    --The addition of low-carb food sections appears to be declining, with fewer than half (49.4 percent) of all retailers now offering them.

    The report additionally found that remodeling is the top construction activity for food retailers. Remodeled stores accounted for 5.7 percent of all stores, up from 4.9 percent in 2004, while new stores represented 3.0 percent (flat at 3.1 percent) and store closings 1.9 percent (down from 2.5). Almost 60 percent of retailers polled invested in the remodeling of at least one store.

    According to the report, the typical supermarket size is 48,175 square feet, with 72.4 percent of the store dedicated to selling space. These stores carry an average of 45,000 items, have 10 checkout lanes, and conduct 15,345 transactions weekly.

    FMI gathered data for the report via mail-in questionnaires sent to FMI member companies in the United States. Seventy-seven companies, representing 4,208 stores, sent answers.

    To buy "Facts About Store Development 2005," go to the FMI Store at http://www.fmi.org/store or call (202) 220-0723.

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