Demand from supermarkets and grocery stores have challenged industry operators.
New York, NY (PRWEB) January 17, 2014
The Specialty Food Stores industry has consistently experienced revenue growth over the past five years. However, mounting demand from supermarkets and grocery stores, which account for about 85.0% of the $88.9 billion Canadian food retail market, have challenged operators to redefine their positions in the midst of volatile consumer sentiment and rising food prices. This industry has thrived, thus far, by offering expertise and quality products, such as baked goods, confectionery, nuts, dairy products, coffee, tea and soft drinks. Industry revenue therefore increased at an annualized rate of 2.7% to $1.9 billion over the five years to 2013. With consumers returning to prerecession spending habits since 2011, revenue is estimated to increase by 1.0% in 2013.
“With increasing obesity rates, unhealthy eating habits has been targeted as a cause for concern,” according to IBISWorld Industry Analyst Sally Lerman. For this reason, consumers have turned toward a diet rich in organic foods, which are known for enriched health properties. Revenue was conversely boosted by a period of consolidation, which emerged as a result of economic instability. The number of industry enterprises is therefore expected to decrease at an average annual rate of 2.9% in the five years to 2013. The largest decline was 7.1% in 2009, during the height of the recession, while consolidation has been tapering off since then.
In the five years to 2018, the industry is forecast to exhibit more steady growth, albeit at a slower pace. Per capita disposable income and consumer confidence will increase, as the economy continues to strengthen, providing consumers with more discretionary income to spend on the industry's premium items. “Additionally, growth in the organic foods market and the immigrant population will stimulate increased demand for organic and ethnic products,” says Lerman. However, these gains will largely be offset by increasing competition from supermarkets since their product lines will be expanded to include such goods.
For more information, visit IBISWorld’s Specialty Food Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry retail food products including baked goods, confectionery, nuts, dairy products, coffee, tea, soft drinks and other foods. This industry only retails packaged products and excludes products sold for immediate consumption (e.g. coffee shops). Butcher shops, seafood markets and produce markets are also excluded from this industry, along with producers of chocolate, bread and bakery goods.
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