The focus on fresh that’s evident in the recent repositioning campaigns of some of Canada’s leading supermarket chains reflects more than just competition within the grocery industry – it’s a major salvo in the battle for share of stomach.

Nick Jennery, president of the Canadian Council of Grocery Distributors, the association representing distributors and marketers of food and grocery-related products, says grocery chains are facing more competition from a wider range of competitors than they ever have before.

Obvious rivals are smaller specialty food stores, convenience stores and general merchandise stores, but Jennery says supermarkets are also competing with the food service industry to feed time-strapped consumers.

Although the grocery store industry in Canada is worth about $57 billion, it accounts for only about 55% of Canadians’ share of stomach. The remaining 45% of meals served can be attributed to food service purchases.

In the u.s., Jennery says the breakdown is closer to 50-50 because restaurants do not have to charge gst like Canadian businesses, making food service meals there less expensive.

He says the two major trends in the grocery industry – fresh products and prepared meal solutions – are not only answering consumer demand for fresh, new and different products but also help to minimize inroads made by the foodservice and specialty store sectors.

Jennery predicts the trend toward fresh will continue, with the marketplace atmosphere of in-store specialty boutiques such as bakeries, delis and coffee bars becoming even more popular. There will also be more in the way of complementary services, such as banking, flower vending, greeting card stalls and so on, he says.

‘You’re seeing a lot more attention to who the consumer is, what they’re doing and what they’re likely to want than ever before. It used to be an intuitive skill, now it’s a science,’ says Jennery, citing the loyalty card programs that allow retailers to track purchase history.

‘All the major [grocery] retailers have loyalty cards. They’re spending huge amounts of money to try to understand their consumer, particularly their loyal consumer.

Jennery says in addition to the large investments they’re making in database and other new technologies, grocery chains are also spending a lot more on renovations than they did in the past.

The rules of thumb about how often to do a minor renovation and a major one have changed, he says, and today they have to be done much more frequently.

‘The whole freshness trend has taken off very quickly. If your next major renovation was planning for three years from now – guess what, you’re going to miss it.

‘People have to reinvest to stay alive. Convenience stores are a classic example. You’re seeing a lot more fresh foods and food service products appear in those stores than ever before.

‘They’ve had to change extremely quickly. You can lose market share in a matter of months. Being fast and flexible are the watch words of being a retailer today.’