Specialty Food Stores

Tag : specialty foods

The specialty food store industry includes about 20,000 stores withcombined annual revenue of $20 billion. Major companies includeWhole Foods and Trader Joe's. The industry is fragmented: the 50largest companies have less than 50 percent of sales.

The industry includes gourmet food stores, natural/organic foodstores, health food stores, meat or seafood markets, fruit andvegetable markets, bakeries, and candy and nut stores.

COMPETITIVE LANDSCAPE

Consumer spending and tastes drive demand. The profitability ofindividual companies depends on effective merchandising and theability to generate store traffic. Large companies can offer a wideselection of products and have advantages in purchasing,distribution, and marketing. Small companies can competeeffectively by offering specialty products, providing superiorservice, or serving a local market. The industry islabor-intensive: average annual revenue per worker is about$100,000.

Competition includes traditional grocery stores, massmerchandisers, and warehouse clubs. Specialty food stores alsocompete with any venue serving food, including restaurants.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products sold by specialty food stores include meat, fish,and poultry (40 percent of sales); produce (15 percent); and bakedgoods and candy (10 percent each). Other products include drygrocery products, dairy products, prepared foods, and kitchenware.Companies may place special orders for customers looking for uniqueitems.

Specialty food stores include chains, independent retailers,franchises, and cooperatives. Franchises include companies such asGreat Harvest Bakery, Cinnabon, and Rocky Mountain ChocolateFactory. Specialty food cooperatives.