Walmart and Amazon threaten supermarket share

In America the first supermarkets appeared more than a hundred years ago. They were a groundbreaking idea, putting grocers, greengrocers, bakeries, butchers out of business

In America the first supermarkets appeared more than a hundred years ago. They were a groundbreaking idea, putting grocers, greengrocers, bakeries, butchers out of business. Today, giants such as Walmart and Amazon are becoming ballast, so is their own capital closing down? As the Wall Street Journal reports in its article, the Piggly Wiggly company in Memphis, Tennessee was the first to establish self-service stores in 1916, while in Queens, New York, King Kullen was founded in 1930, which introduced the innovation of an extensive store with separate food sections and low prices. The supermarket boom in the US was linked to the boom in suburbs and car ownership, as well as population growth of 15% per decade. In 1950 they accounted for 35% of all retail food sales and reached 70% by 1960.

This market is not growing so fast anymore. Population growth slowed to 7.4% in the decade 2010-2020. Meanwhile, competition for both value and convenience has intensified, with the likes of Costco, Walmart and Amazon, and even restaurants and fast-food chains. Another category of stores with increased popularity are the Aldi and Lidl type discount grocers, with a more limited selection of products, often private label, and low costs. Those that sell items instead of a dollar are expanding their share, such as Dollar General with a rise of 1.53%. Supermarkets and smaller grocery stores, the Wall Street Journal reports, accounted for 37 percent of total food spending in 1997, and as of last year that figure has dropped to nearly 25 percent, the U.S. Department of Agriculture estimates. However, giants like Costco and Walmart have increased their share of food spending from 4% in 1997 to 10% today. Restaurants and fast food restaurants, which accounted for 33.6% of the household food budget in 1997, are up to 37.4% today. And then there's the Internet. It's hard to beat the convenience of direct delivery to consumers' doors, while Amazon offers discounts to its subscribers. At the moment supermarkets are resisting innovation because companies with popular brands such as General Mills and J.M. Smucker, they pay money to promote their products.

Source: www.kathimerini.com.cy

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