Holding prices down, holding prices at the current levels may not be good enough. The confluence of global competition, new avenues of food distribution and legacy retailers refusal to adapt with the times may lead some companies too follow the path of A&P or Supervalu rather than grocerants the ilk of Trader Joe’s or Whole Foods.
With a drought China and flooding in Australia complicating issues the price of raw ingredients cost will continue to rise on a global level. In Japan we are now witnessing at the high end; competitive pricing volatility within the Sushi restaurant sector.
In Great Britain Tesco, J Sainsbury and Asda are locked in a battle for consumer within the all food products categories including for the first time grocerant ready-2-eat and heat-N-eat fresh and prepared food. The grocerant sector continues to grow, but for the first time we are witnessing in Europe price pressure for market share.
The restaurant sector in the US is bundling grocerant ready-2-eat and heat-N-eat fresh prepared meals starting at $3.00 to $5.00 with no sign of letting up. It’s clear that whoever raises prices first will lose market share. This is going to create franchisee disequilibrium and copy-cat niche players the ilk of Round Table Pizza may well end up chapter 11 as well. Differentiation in product and positioning not copy cat positioning or product will lead companies forward.
With Walmart expanding its fresh food offerings and “better for you” ala healthier food options the grocery sector in the US will see its share of disequilibrium as well. Look for a battle of private label products developing in 2011.
Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. For product or brand positioning assistance contact Steven A. Johnson and Foodservice Solutions® or visit http://www.linkedin.com/in/grocerant or on Facebook at Steven Johnson, GOOGLE: Steven Johnson Grocerants or twitter.com/grocerant