Photo: WikiMedia Commons
It looks like the way to the American consumer’s heart is through their stomach.Walmart, Target and Dollar Tree are all fighting competition from Amazon by stepping up their food offerings.
Focusing on food appears to be the right strategy. Sales at Walmart and Target grew this year, according to a study by Kantar Retail and published in STORES magazine. They also skyrocketed at grocery store chains like Kroger and Safeway.
Grocery chains H.E.B., Whole Foods Markets, Aldi and Wegmans also enjoyed double-digit growth last year, according to the study.
Amazon has an offering of packaged foods on their site, and offers Amazon Fresh, a grocery service, in Seattle. But so far, they haven’t had a widespread influence on the food industry.
Rich Yamarone commented on this trend in a Bloomberg Insight last month (via John Mauldin):
Walmart continues to perform much better in the grocery aisle than in its apparel and footwear section. They are very much aware of how critical grocery items are to the consumer. In its last quarterly earnings conference call, Wal-Mart mentioned, “As we move into the second quarter, we remain mindful of potential challenges for our customers. The overall economy is still our customers’ main concern. In particular, they remain concerned about job security or the availability of jobs, followed by gas and energy prices and rising food costs. Food is consistently the top monthly expense outside of housing and vehicle payments.”
Here’s a chart showing the top 10 retailers and their annual growth:
Photo: Kantar Retail
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