Meat + Poultry - October 2007 - 58

Retail news and trends
Supermarket sales
up in 2006
Supermarket industry sales increased
5.3 percent in 2006 and same-store sales
rose 4 percent, according to the Food
Marketing Institute's (FMI's) 59th annual
Food Retailing Industry Speaks: Annual
State of the Industry Review 2007, a report released during this year's annual
FMI show in Chicago.
The industry-wide and same-store
sales figures were up from 4.6 percent
and 2.4 percent, respectively, in 2005.
Large chains led in sales growth
and dominated overall industry performance, according to the report. While
23.9 percent of the companies posted
sales losses when comparing 2006 to
2005 total retail sales, many of the larger
chains posted sales gains of 5 percent
to 7 percent and higher.
The report goes on to note with annualized inflation for food-at-home at 1.7
percent, the industry sales increased at a
much faster pace than inflation, resulting
in a real sales gain of 3.6 percent.
"These results are impressive in
view of all the rising costs the indus62

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try must bear, including energy, health
care, credit card interchange fees and
the imperative to keep improving products and services in today's extraordinarily competitive marketplace," said
Michael Sansolo, FMI senior vice president. "However, it is also clear that
many retailers are struggling to solve
the puzzle of cutting costs as much as
possible while continually improving
customer service."
Supermarkets are continuing to
adapt their products and services,
with an increased focus on perishable products, according to the report. Stores offer a variety of meal
solutions, with 94.3 percent operating
delis, 90.8 percent offering prepared
foods for takeout, 64.4 percent offering areas inside the store for the consumption of meals, and 36.8 percent
have "quick-stop areas" for consumers
looking for prepared entrees and sides
for the evening's meal. Additionally,
52.9 percent offer sushi stations and
64.4 percent offer catering.
Natural and organic products have
also made inroads into supermarkets.
The report indicated that 72.4 percent

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of the chains surveyed feature a natural/organic food aisle or section, and 46
percent of the retailers surveyed are offering private label organic foods.

FMI report:
Consumer
confidence in food
safety declining
The constant stream of news related to
food-safety events, such as E. coli tainted spinach, peanut butter contaminated with Salmonella, and melamine in
pet food and livestock feed has taken
a toll on consumer confidence, according to the Food Marketing Institute's
"Grocery Shopper Trends, 2007," which
was released earlier this year during
the FMI show.
The number of consumers "completely" or "somewhat confident" in the
safety of supermarket food declined
from 82 percent in 2006 to 66 percent
in 2007, the lowest point since 1989
when the issues of pesticides in apples
and contaminated grapes were widely
reported. The survey found consumer
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Meat + Poultry - October 2007

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