Professor Lamel
September 26, 2012
Section 001
When reading the article "Supermarkets and Grocery Stores in the US" in the IBUSWorld Industry reports I found a number of things interesting. One that stuck out the most to me was the fact about how the Grocery Store and Supermarket industry makes up the largest food retail channel in the U.S. They are accounting for more than 72% of a $680 billion industry. I guess if I think about it it does make sense because I cannot think of any other large food retail chains that could surpass this huge competition.
Some other information I found that was great was the graph charts displaying per capita disposable income. I found this intriguing because they had statistics for the past eight years but also the next four years as well. I would like to know how they found that data and maybe learn how to figure it out for myself.
It was hard to tell what my initial thoughts were about the future of this industry because there were graphs that showed expected data for the future. One of the graphs displayed the index of consumer sentiment in years. Consumer sentiment is basically when people choose shop at grocery stores versus eating out. Though eating out can be cheap, people still chose to buy their dinners at supermarkets than restaurants in 2004, with an index of about 95. During the recession of 2008-09, the index plummeted to roughly 65 because times were tough and people only had the money to spend on cheap fast food. Since then, it has slowly crept back up to about 70 now and is expected to keep rising up to 85 by 2018. All in all, the future looks bright for grocery stores and supermarkets seeing that they have had very few, if any, drops since the recession.
Another fascinating detail of information that caught my eye in this report was that in 2007 and 2008 were this industry’s most successful years, in which revenue grew 1.7% and 2.5%, respectively. I found this to be interesting because the recession started in 2008 and revenue actually did not start to fall until 2010 and 2011, according the the graphs. The reason for this is that consumers did not start widening their budgets until this time and they returned to pre-recession food habits, including visiting restaurants.
This is just a brief summary of our industry from the prospective of the article I found called "Supermarkets and Grocery Stores in the US."
I find it extremely surprising that people had turned to eating fast food as a way to save money during the recession because I had always figured that when you buy your own from supermarkets, you are saving a lot of money. Isn't it that by shopping at the grocery store for food, you're spending less money because you're reducing the amount that you would pay for the price of labor that is calculated in your pre-made food? I guess fast-food is a cheaper because the quality is not as good.
ReplyDeleteYes, Bea, it is true that fast food can be cheaper in "most" circumstances. As I read deeper into my article, I found that it can be cheaper to buy store brand or generic brand foods from the grocery store. I would think, though, that with a low income people are more opt to buy food that is quick, easy, and cheap, such as fast food. Because it costs money to buy food and sometimes prepare it, and people may have a lower self-esteem with smaller paychecks, people with low incomes have a higher probability of purchasing fast food than people with higher incomes.
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