Who’s the better toy and friend for Andy? Woody or Buzz? Cowboy or space ranger? That critical question started the plot of Pixar Animation’s “Toy Story” in 1995. Of course, by the end of this top animated film, even the toys realize that they each are unique and have a certain place in a young boy’s heart.

Similarly, the nation’s retailers are in fierce competition for consumers’ love and food dollars. Then again, it’s clear that consumers aren’t necessarily wedded to just one concept. When it comes to finding value, today’s shopper plans ahead and is willing to visit supercenters, mass merchandise outlets, supermarkets, club stores and even dollar stores. Moreover, operators in each of these formats have been adding refrigerated cases and freezercases to both new and existing stores.

Still, just as Toy Story’s Buzz Lightyear attracts the most attention, it appears that supercenters capture the most consumer trips. In its “Times & Trends: Channel Migration 2008” report, Information Resources Inc. concluded, “Facing unprecedented financial burdens as gas, energy and CPG costs skyrocket simultaneously, consumers have made dramatic changes in where and how they shop.

“Consumers are balancing the need to save money on CPG products with the need to conserve gas; the result is fewer, larger trips. Supercenters have been the biggest beneficiaries of consumer change, securing sizable share gains across every major CPG department, across income and life stage segments and among heavy shoppers of competing channels. The grocery channel has lost ground across fresh-perishable, frozen and center store, including high-demand meal ingredient and meal component categories.” 

IRI said its sales data show that - from fall 2007 to fall 2008 - supercenters were the only store type to achieve sales gains across six key grocery retail departments while traditional grocery retailers showed declines in four of six departments. Furthermore, supercenters exhibited gains with all income levels and with three high-potential market segments, including baby boomers, Hispanics and households with kids.

Issuing a similar industry assessment was The Nielsen Co., Schaumburg, Ill.

“Mass merchandisers and grocery stores are feeling the impact of the supercenter,” said Todd Hale, senior vice president, Consumer & Shopper Insights. “Where we really start to see the expanding reach of the supercenter is in grocery, where a shift is occurring in everything from dairy to produce to meat and frozen foods. While the grocery channel has traditionally been viewed as recession-resistant, it is not recession-proof.”

Just last month, the Food Marketing Institute, the nation’s largest traditional supermarket association, delivered its own report: “2009 Food Retailing Industry Speaks: Annual State of the Industry Review.”

Officials said supermarket industry sales increased 5.2 percent in 2008, and identical-store sales rose 4.5 percent, but these gains were offset by the 5.7 percent food-at-home inflation rate last year. Adjusted for inflation, sales declined 0.5 percent and identical-store sales 1.2 percent.

“The industry showed its resilience in the most challenging economy in modern history,” noted FMI President and Chief Executive Officer Leslie G. Sarasin. “Retailers aggressively discounted products and increased their lines of private brands to help American families lower their grocery bills. At the same time, they continued to control costs by improving efficiency and productivity, a hallmark of this industry.”

Looking at the future, retailers reported increasing concern about the impact of numerous issues - especially the economy - which is having a pervasive impact on the industry. The impact of issues, measured on a 1-to-10 scale with 10 being the highest, increased for nearly every issue, comparing the rating in 2008 with the expected impact in 2009-2010. For the first time in the six years FMI has tracked concern levels, retailers rated the impact of two - competition and the economy - at 8.0 or more. 

FMI said supermarkets are responding strongly to consumer demand for lower-cost foods in three ways. First, the research found a significant increase in companies emphasizing low prices as a competitive strategy. Second, retailers are featuring private brands more prominently. Third, half of supermarkets are offering savings through frequent shopper or loyalty card programs, and rate their success as rising.

FMI noted that supermarkets continue to pursue strategies other than discounting prices. Nearly all (97.3 percent) emphasize that perishables will gain a competitive advantage and gave it the highest success rating at 8.1, although this figure is down from 8.4 in 2008.

In addition, 68.4 percent are focusing on consumer wellness and family health as a competitive strategy, rating its effectiveness at 5.6. These figures decreased from 84.9 percent and 6.5, respectively.

Nielsen data also suggest that warehouse clubs and dollar stores have reaped “significant benefits” from a recession-minded consumer base. Warehouse clubs saw increases across the board, while dollar stores racked up gains everywhere but in general merchandise and health and beauty aids.

“Consumers continue to look for ways to stretch their dollar, and in some areas, that means shifting their spending in traditional grocery departments such as frozen and dry goods to warehouse clubs and dollar stores,” said Hale. “That said, the positive shifting for the warehouse and dollar channels are not enough to offset losses due to consumers simply cutting back in this difficult economy.” - B.G.