ABM910 8. Principal trends in food wholesaling and retailing (2).pptx

wholesaling

1. ABM-910 Food Retail Management Dr. Muhilan Mahendhiran , Ph.D., PDF Associate Professor Faculty of Agriculture Vivekananda Global University, Jaipur Principal trends in food wholesaling and retailing

2. Principal trends in food wholesaling and retailing Trends in Wholesale Food Distribution First, we need to consider that wholesale Food Distribution has two branches: One buying in large quantities and selling to big retailers and more local food wholesalers. And a second one distributing to collective and independent restaurants, called Wholesale Food.

3. Principal trends in food wholesaling and retailing Growing Competition Prior to 2019, most of us did not give much thought to the supply chain or its channel members. We went to the store and were welcomed with endless aisles of the products we were used to purchasing. However, when the COVID-19 pandemic hit, the entire country became more in tune with channel members. Wholesalers were not unaffected by the disruption that the pandemic caused channel members, and new trends are on the horizon for wholesalers.

4. Principal trends in food wholesaling and retailing Growing Competition Wholesalers are a central link in the economy and supply chain. The industry is facing tough competition with new as well as nontraditional wholesalers entering the market. Just as consumers are demanding more convenient shopping experiences and increased value in products and services, retailers are demanding the same from their intermediaries. Wholesalers must find innovative and competitive business models to compete.

5. Principal trends in food wholesaling and retailing The Impact of Global Dynamics on the Supply Chain Globalization has been integrating global markets for the past several decades. Moreover, supply chains have had to adjust to keep up with these changes. With products available from around the world at lower costs and retailers demanding faster deliveries, many wholesalers have expanded their operations in response to the rise of the global economy. This comes with its own set of challenges, such as an expanded sales force and the need to understand other economies, cultures, and languages.

6. Principal trends in food wholesaling and retailing The Impact of Global Dynamics on the Supply Chain More recently, it has become apparent in the United States and around the world that supply chain participants were not prepared for disruptions such as those seen during the COVID-19 pandemic. Shortages of workers, products, containers, and long-haul truck drivers have proven to the industry that some major changes need to occur.

7. Principal trends in food wholesaling and retailing Increased Demand for International Foods As more and more people hope for cultural diversity to hold a prominent place in our communities, wholesale stores are expanding their product lines to include a wider variety of foods, spices, and ingredients for every palette.

8. Principal trends in food wholesaling and retailing Rise of Direct-to-Consumer Delivery Especially since the pandemic, direct-to-consumer (DTC) delivery has emerged as a major trend in the wholesale food distribution industry as more consumers seek the convenience of ordering goods from the comfort of their homes. This revolutionary consumer model eliminates the need for trips to the grocery store and can instead all be done on a cellphone or other device. As a result, many wholesalers are partnering with DTC platforms (like Doordash and Uber Eats) to expand their reach and give customers a more personalized shopping experience.

9. Principal trends in food wholesaling and retailing Regulatory Requirements and Complexity With advancements in technology (and the need for consumer security) as well as the growing global economy, regulatory requirements also increase—and become more complex. Wholesalers must understand such requirements in order to conduct business legally. For example, wholesalers need a special license to distribute restricted goods, such as alcohol, controlled drugs, firearms, and pesticides. Depending on the type of transportation mode being used—such as tractor-trailers hauling containers—special licensing may need to be obtained.

10. Principal trends in food wholesaling and retailing Regulatory Requirements and Complexity Wholesalers also have a large responsibility when it comes to disposing of waste. More specific government regulations in regard to wholesalers include the Sale of Goods Act, which requires goods sold to be safe and include clear directions. The government has also enacted various rules to protect consumers and to be able to trace products.

11. Principal trends in food wholesaling and retailing Consumer Protection Caveat emptor  (Latin for “let the buyer beware”) was a long-standing motto in commercial transactions, one that implies the buyer purchases at their own risk. However, consumer protection laws are now woven into the fabric of the economy. Regulations help keep sellers honest and consumers protected. In general, consumer protection regulations exist to prevent unethical or dangerous business practices throughout the distribution channel. These practices range from false advertising to predatory lending to scams and frauds.

12. Principal trends in food wholesaling and retailing Product Traceability Product traceability  refers to the ability to track all processes for a product, from the procurement of raw materials to production, consumption, and disposal. Increasing numbers of consumers want to know exactly where their products are coming from and whether they are ethically sourced. Aside from consumer demand, it is a crucial part of the distribution channel as product recalls become more common.

13. Principal trends in food wholesaling and retailing Product Traceability For example, on January 6, 2022, the US Department of Agriculture (USDA) announced a recall of over 25,000 pounds of ground beef. Because of product traceability, the specific ground beef under the recall was able to be traced to a specific location, production date, and lot. Without product traceability, there may have been no way of knowing where the ground beef came from, forcing consumers to discard purchases of product that was not tainted. Additionally, product traceability helps combat counterfeit products by finding the originating source.

14. Principal trends in food wholesaling and retailing Challenges of Technology Evolution The advancement and increased use of technology has brought about both challenges and opportunities for wholesalers. Product traceability has become increasingly easier, for example: Orders are easier to make and track. However, technology is expensive and comes with a learning curve for new users. The increased demand of consumers and retail customers requires wholesalers to keep up with technological advancements to stay competitive.

15. Principal trends in food wholesaling and retailing Trends in Wholesale Food Distribution Looking Ahead 1. Expansion of E-commerce Platforms 2. Adoption of Artificial Intelligence 3. Sustainability is More Important Than Ever 4. The Veganism Uprising

16. Principal trends in food wholesaling and retailing Current Trends in Food Retail While the growth of channels and competitive outlets has had massive implications over the past twenty years, there are other significant factors influencing food retailing in the United States, including demographic changes, consumer demand for convenience and solutions, and cost pressure. Specific to demographics, food retailing is being influenced by younger generations, and the increasing cultural diversity within the country. This is reflected in the focus on fresh and local foods, the rise of ethnic foods and flavors, the mainstreaming of natural and organic products, nutrition and health credentials, and single-serve and portion control.

17. Principal trends in food wholesaling and retailing The Rise of Healthy Food In an effort to manage general health, many youngsters have become more focused on diet and the role that food plays in managing wellness. As a result, manufacturers have responded by improving the health credentials of their items. This often manifests in avoidance trends such as sugar-free, fat-free and low-sodium products. For growers, producers, and retailers, this trend has also been reflected in increased consumption of fresh and local foods, primarily produce, but also extended to meat, fish, and poultry.

18. Principal trends in food wholesaling and retailing Increasing attention to health maintenance through diet has put focus on fresh, organic and all-natural products.

19. Principal trends in food wholesaling and retailing The Rise of Healthy Food The task of food wholesalers and retailers is to provide consumers with the right foods, at the right time, and at the place at a profit. Think about the many place where you purchase food today. Food retailers include, in addition to the traditional supermarket, bakery shops, department stores, drugstores and discounters, gasoline filling stations, stop and shop convenience stores, the school cafeteria, fast food shops.

20. Principal trends in food wholesaling and retailing The Rise of Healthy Food Food is never far away. Because of their close contact with consumers, food wholesaling and retailing firms are prime examples of how marketing agencies change in response to new demands and competitive conditions. The large super markets that handled a much wider variety of foods and nonfood items on a self service, cash and carry basis. This trend reflected changing consumer preferences, competitive pressures, and changes in the relationships of food processors, wholesalers, and retailers.

21. Principal trends in food wholesaling and retailing The Rise of Healthy Food There are other changing signs of food retailing. Consider the shopper who notices that many food products can now be purchased at K-Mart, Wal-Mart, or wholesale club. Consumers are purchasing prepared foods for take out in convenience stores and supermarket delicatessens. Another busy family places food order by phone and has their food delivered weekly.

22. Food Processing Assembly Markets Shippers auctions Commission houses cooperatives Agents, brokers buying offices Importers Jobbers, Agents Merchant Chain store Mfg. Sales Foodservice Exporters Purveyors Food Brokers Wholesalers Warehouses Offices, Wholesalers Nontraditional Stores Retail Food store Food Service *Department store *supermarkets *restaurants *Gasoline stations *convenience stores *institutions *specialized food stores * plants, offices *recreational places Fig: Structure of the wholesale-retail food distribution network Principal trends in food wholesaling and retailing

23. Principal trends in food wholesaling and retailing The food chain store movement Although the terms chain stores and supermarkets are used synonymously today. These two forms of food retailing developed quite independently and for somewhat different reasons. A grocery store is usually classified as a supermarket if its annual sales exceed $2 million it emphasizes service and features dairy meat, produce, and dry grocery departments. A chain store operation is a group of two or more related grocery stores. Chain stores may or may not be supermarkets and supermarkets may or may not be part of a chain store operation.

24. Principal trends in food wholesaling and retailing The food chain store movement As a result of these competitive adjustments, food retailing is comprised of three segments today. (1) The corporate chain stores are the national and regional grocery wholesaling and retailing operations that are centrally managed. (2) Affiliated independent chain stored are independently owned grocery stores that have affiliated with food wholesaling operations in order to gain the economies of large scale buying and to share the costs of retail services. (3) Unaffiliated food stores not related in any formal way to a wholesaling operation. These grocers have experience a long term decline in market share.

25. Principal trends in food wholesaling and retailing Alternative food store formats The conventional supermarket, with 30,000 to 40,000 square feet of selling space and up to 18,000 different items, is declining in numbers and market share. Despite its early success, it soon became apparent that no one store type could satisfy the needs of all consumers. Self service Highest percent of food versus nonfood items

26. Principal trends in food wholesaling and retailing Combination stores include a food store and drugstore under one roof. The numbers of combination stores tripled between 1980 and 1985 and the number of superstores doubled. These stores add large units of capacity in food retailing and have often triggered heavy price competition in local markets. More product variety Nonfood item 25 to 35 percent of sales Nonprescription drugs and general merchandise Size range from 35000 to 45000 square feet

27. Warehouse food stores eliminate services and frills and make a strong low price appeal. Products are often displayed in their dripping cartons and shoppers may mark their own prices, bag their own purchases, and even supply their own grocery bags. Size ranges from 12000 to 35000 square feet Primarily food, some health and beauty aids, but low general merchandise emphasis. Principal trends in food wholesaling and retailing

28. Principal trends in food wholesaling and retailing A hypermarket is a super warehouse store ranging up to 200000 square feet and providing one stop purchases of groceries, sporting goods, auto supplies, and house wares. Huge variety Food and non food products Ranging from 100000 to 200000 square feet Regional market

29. Principal trends in food wholesaling and retailing A gourmet food stores handles a wide range of premium quality and exotic foods and brands. Variable size High service A convenience store is a small, neighborhood food store featuring long hours, quick service, and a narrow assortment of fast moving staple and impulse items. First opened in the 1960s, convenience stores account for about 15 percent of all food stores sales.

30. Principal trends in food wholesaling and retailing Superstores range up to 60,000 square feet, handle a wide range of general merchandise, feature service departments such as bakeries, delicatessens, and cheese shops, and emphasize low prices. Some prescription drugs carried Generic and specialty product areas Some self service bulk foods Average size 35000 square feet

31. Principal trends in food wholesaling and retailing The limited assortment store is a smaller food store, handling only about 500 nonperishable grocery products at deep price discounts. Limited number of product brands Stock the most popular size product Less than 10000 square feet

32. Competition and pricing in food retailing Retailers use temporary, selective price cuts to differentiate their stores and attract consumers. Trade estimates indicate that about 20 percent of grocery items are usually sold at or below cost. Chicken, coffee, bread, milk, and other popular items frequently priced to attract the price conscious shopper. This pricing strategy relies on the consumers tendency toward one stop shopping. Principal trends in food wholesaling and retailing

33. Competition and pricing in food retailing Still another food retail pricing strategy is to maintain low prices in the store on every item year round. This is called everyday low pricing (ELP) and is the strategy of many of the newer food stores, such as warehouse clubs, discount stores, and superstores. Therefore, low profits or losses on the featured items can be made up by purchases of the higher profit items. Principal trends in food wholesaling and retailing

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