By George Anderson
Looks like just about everyone is in the food business today.
Drugstores are.
As Jay McIntosh, director for retail and consumer products at Ernst & Young, told Investor's Business Daily, "If you think of what a drugstore really is, it's two things. It's where to pick up prescription drugs and it's also a convenience store. We're seeing them become more effective convenience stores. Now that they have people in there, they have what people want."
Walgreen's spokesperson Tiffany Bruce agrees. She said the drugstore chain is able to grow its business by "being more convenient for our customers," adding "that pretty much speaks to why we have increased our assortment of products in the refrigerated section."
Dollar stores are steadily moving into the food arena, also.
Family Dollar Stores launched a refrigerated and frozen foods program earlier this year and the chain is looking to have over 500 stores with cases humming by August.
"The sale of milk and bread and eggs and cheese and some frozen foods is very consistent with the convenience aspect of our business," said former Family Dollar executive vice president George Mahoney.
Convenience stores have always sold food but now the channel is expanding its horizons to more fresh items and upscale prepared dishes, as well.
The CFO of 7-Eleven, Edward Moneypenny, told investors last month, "There's a huge market out there for fresh food or fast food today. We think we're well-positioned as a chain to capture more of the portable fast food business."
The big losers to date with the growing number of places for consumers to buy food have been the traditional supermarket chains and independent grocers.
Howard Davidowitz, chairman of Davidowitz & Associates, said, "The traditional supermarket share has collapsed. In 1988, 90 percent of food and consumable dollars were spent at traditional supermarkets. Today it's less than 56 percent and going south."
Moderator's Comment: With the clarity of 20/20 hindsight, was the decline of traditional grocery's share of market inevitable? Do you think further serious erosion is also inevitable? Why or why not? - George Anderson - Moderator