today’s market does not allow room for the small retailer to compete given that Wal-Mart will often feature name brand items at below wholesale cost.
(PRWEB) November 29, 2011
The Canadian supermarket sector continues on its path towards consolidation. While specialty and gourmet retailers are still finding their niche in the marketplace, single store operators are finding it increasingly difficult to compete.
Aaron Wagschal, Vice President of Innopex Limited, is quoted as saying, “today’s market does not allow room for the small retailer to compete given that Wal-Mart will often feature name brand items at below wholesale cost.”
There are some who believe that there is still value in having small retailers in the marketplace and there can be a way for them to compete with the Wal-Mart's of the world. Innopex has specialized in the purchase of excess inventories from the likes of Unilever and Procter & Gamble. The price structure the company can then offer the independent retailer allows them to compete with the chains that dominate the sector. With this in mind Innopex Limited, distributors within the health and beauty care industry, have made it their goal to service the independent retailer.
Aaron Wagschal goes on to say, “ it is unfortunate that the corner grocer is almost extinct as they have surrendered to the mega retailers”. In a February 2011 study, the OSEC – Business Network Switzerland conducted an in depth study of the Canadian Supermarket industry with an eye for opportunities for Swiss based companies. The findings of the OSEC report confirm the rapid pace of consolidation within the sector and state that the grocery market is highly concentrated and vertically integrated into food distribution, with the top five retailers accounting for 80% of total food sales. The retail environment is dominated by big box stores accounting for approximately 70% of food sales.
Until recently, the Canadian grocery retail had been dominated by a few domestic players operating in a traditional supermarket store formats. But the growing market for food products in Canada has attracted new entrants and encouraged non-traditional food retailing. While supermarkets comprise the largest percentage of retail food sales, general merchandisers (i.e. Walmart), club warehouses stores (i.e. Costco), drugstores (i.e. Shoppers Drugmart) and others are quickly following suit with growing food sales. There are a number of store formats in Canada, some of which are equally popular between both chain and independent grocers.
The largest food retailers are Loblaw Companies, Sobeys and Metro chains. The large US retailers Walmart and Costco have been quite successful at penetrating the Canadian market and growing their market share over the past two decades. The inherent difficulties within the marketplace for the small retailer are a natural partner for companies such as Innopex who can partner in an attempt to even the playing field .
If you would like more information on Aaron Wagschal you can visit his personal website http://www.aaronwagschal.com. To learn more about Innopex Limited you can visit their corporate website at http://www.innopex.com
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