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    Study Finds Grocery Stores Feeling Impact of Alternate Formats

    ELMWOOD PARK, N.J. - Economic reports released by The Food Institute and the government in recent weeks confirm that grocery store sales were weaker than expected during the holiday season and are not showing much improvement.

    ELMWOOD PARK, N.J. - Economic reports released by The Food Institute and the government in recent weeks confirm that grocery store sales were weaker than expected during the holiday season and are not showing much improvement.

    Supermarket sales during December posted the largest decline since March of 1998, dropping 1.5 percent. "When the inflation rate for food is considered, that decline is even more substantial," according to Brian Todd, president of the Elmwood Park, N.J.-based non-profit trade association.

    "What we call supermarket 'real' sales dropped significantly more, by the largest amount in over five years -- a staggering 4.3 percent," said Todd.

    Using its exclusive Grocery Store Price Index (GSPI), The Food Institute deflates changes in the government's retail sales figures. The GSPI weighs inflation for food and non-food products moved by grocery stores.

    As a result of the December drop, The Food Institute found that "deflated" grocery store sales declined for the second consecutive year during 2002 -- by 0.29 percent, only slightly less than the 0.32 percent drop recorded in 2001.

    "A good portion of this decline can be attributed to increased sales in other retail formats that are selling more and more food products," said Todd, noting that in most regions, discount chains and warehouse clubs recorded better results than supermarkets.

    While the U.S. government has not yet released sales data for superstores and warehouse clubs for December, Todd said sales at these outlets during November jumped a significant 15.7 percent over the prior year. Drug store chains, which have also expanded their food offerings in recent years, saw sales during the same month rise 6.6 percent.

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