Specialty Food Stores Industry Overview

Excerpt from Specialty Food Stores Report

Companies in this industry sell meat, fish and poultry; produce, baked goods, candy, and gourmet foods from physical retail locations. No major companies dominate the industry. Sales of specialty foods have been increasing worldwide as demand for ethnic foods has continued to grow. In part, the increase comes from immigrant consumers seeking out foods from their own cultures. Ethnic food sales are growing at 14 percent a year in Europe and 5 percent in the US, according to Datamonitor.

Competitive Landscape

Consumer spending and tastes drive demand. The profitability of individual companies depends on effective merchandising and the ability to generate store traffic. Large companies can offer a wide selection of products and have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by offering specialty products, providing superior service, or serving a local market. The industry is fragmented: the 50 largest companies account for 15 percent of sales.

Products, Operations & Technology

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