Rising Food Costs Drive Competition in
Grocery Sector According to BIGresearch

Regional Competition and Prescription Programs Important Factors

COLUMBUS, OH -- (MARKET WIRE) – 5/28/08 – With food costs on the rise, shoppers are feeling the pinch and looking for ways to stretch their grocery budgets. Wal-Mart maintains a strong lead in the Groceries category among all adults nationwide (16% say they shop there most often) and is increasing competition for regional players, according to the May Retail Ratings Report from BIGresearch (http://www.bigresearch.com).

While shoppers in the Northeast head to Shoprite most often to stock their pantries, the grocer only saw a marginal increase in consumer share year over year (9.5% in May 07 to 10.1% in May 08), giving them a positive Consumer Equity Index™ (CEI)* of 106.29. #2 Stop ‘n Shop’s growth remained flat with a CEI of 99.09 while #3 Wal-Mart saw a substantial increase in share with an index of 126.40. *CEI measures growth in share year over year. An index of 100 is flat, while an index of 105 indicates 5% growth.

Safeway tops the list for grocer shopped most often in the West; however, growth in consumer share remains flat with a CEI of 100.98. More shoppers are heading to second place Wal-Mart, evidenced in their positive CEI reading of 122.55.

Wal-Mart maintains a commanding lead in the South as a quarter of all adults indicate they prefer to shop the big discounter for groceries. Wal-Mart also leads in the Midwest; 14.9% of shoppers who live there say the same.

“Across the country people are cutting costs, and Wal-Mart’s competitive pricing model is attractive to shoppers,” said Pam Goodfellow, senior analyst of BIGresearch. “However, it’s interesting to see where consumers are going in areas of the country with lower concentrations of Wal-Mart Supercenters.” 

It appears that consumers are consolidating shopping trips, possibly due to high gas prices, as Wal-Mart is gaining consumer share in the Prescription Drugs category as well. 9.6% say they shop there most often for prescriptions (v. 8.1% in May 07), giving #3 Wal-Mart a CEI of 118.37. This is a relatively higher rating than the leaders in the category: #1 Walgreens (103.09) and #2 CVS (102.08).

CVS and Wal-Mart are battling it out for the number 2 position among consumers with household incomes less than $50,000, and Wal-Mart seems to be in place to overtake the druggist.

Prescription Drugs (Shop at Most Often) – HH Income Less Than $50K         

Source: BIGresearch, Retail Ratings Report, May 08

BIGresearch’s Retail Ratings Reports (RRR) are available monthly for 12 major merchandise categories. They are developed from BIGresearch’s monthly Consumer Intentions & Actions (CIA) Survey of over 7,500 online interviews. For a sample of the May report for Groceries (all consumers and by census region), please click the following link: http://info.bigresearch.com/.

About BIGresearch
BIGresearch is a consumer intelligence firm providing solution-based insights of consumer behavior, present and future, in areas of products and services, retail, financial services, automotive and media. BIGresearch conducts the monthly Consumer Intentions and Actions Survey (CIA) of 7,500+ respondents and the semi-annual Simultaneous Media Survey (SIMM) of 15,000+ respondents. More information is available at http://www.bigresearch.com.

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