The Retail Food Industry in 2003

An understanding of the trends affecting the food industry is a key concern of researchers and industry decision-makers alike.These trends may involve such diverse topics as new technologies, social issues, or the evolving structure of the industry.While such trends may have significant management implications, forecasting these changes is virtually impossible when relying on historical data.Even so, the modern management paradigm is one of anticipating rather than reacting to change.Therefore, corporate executives often turn to expert opinion to guide their business strategies.One such method of business forecasting is the Delphi technique.Typically, this method uses iterative feedback to a group of industry experts, thereby providing a consensus of opinion.In this way, key issues for the food industry may be identified and ranked for subsequent action by management.Using a variant of the Delphi technique, Cornell's Food Industry Management Program surveyed 55 senior level executives in the retail food industry.The respondents were presented 52 scenarios potentially impacting the operation of supermarket companies.The scenarios covered eight general topics, namely: technological development, industry structure, supplier/distributor relations, competition, merchandising, fresh foods, branding, and the environment.Respondents provided an assessment of each scenario as to if it would occur before the year 2003, after 2003, or never.In addition, respondents were shown selected years of supermarket sales distributions, and were subsequently asked to provide a forecast of the distribution of supermarket sales within the general supermarket departments for the year 2003.Finally, respondents were gathered to discuss the final results in conjunction with Cornell's 1998 Food Executive Program.We found four developments were of particular concern for the industry in 2003: 1) ECR and Category Management will come of age; 2) retailers will increasingly command the retailermanufacturer interface; 3) tough competition will reside among food manufacturers; and 4) the "green revolution" will continue to develop.In addition, it is forecasted that traditional grocery sales will continue to decline and fresh food sales will continue to increase in their respective shares of total store sales.Although simplistic in design, this unique study method has been instrumental in the identification of trends and developments defining the face of food retailing.