Is the Supermarket Done For?

Most of the space and much of the profit in a traditional supermarket is taken up by packaged goods that can now be bought more cheaply and conveniently online. Even Whole Foods is suffering.

Which means that as consumer tastes change to healthier, safer and tastier fare, the supermarket has to be reimagined. JL

Stephanie Strom reports in the New York Times:

Shoppers are increasingly shunning the processed, packaged products that fill most of the shelves in the center of the store. Instead, they are hunting the perimeter for fresh fruits and vegetables, yogurts and cheeses, and prepared foods beyond the traditional rotisserie chicken. Walmart, Target and 7-Eleven sell groceries, Amazon and Fresh Direct deliver to the doorstep. Many brands sell directly to consumers, cutting out stores altogether.

“We’ve come in the back door,” the writer Michael Ruhlman said as we entered the chill of the ShopRite supermarket here. “We should be over there, in produce.”

Apologizing to shoppers trying to steer carts toward the exit we had just entered, we made our way to the produce section, where the first thing that caught our attention was the floor. While the middle of the store was carpeted in a grayish linoleum, here was a warm-colored fake wood: our initial clue that fruit and vegetables carried a special cachet.

They have a surprising amount of interesting things here,” Mr. Ruhlman said as he prowled the bins, picking up an aloe leaf. The section also had prickly pears, cherimoyas and delicate zucchini blossoms that caught his eye on the way to a pile of green bananas.

“This I always find fascinating, that people will actually buy green bananas,” Mr. Ruhlman said, noting that consumers who make one big food-shopping trip each week prefer greener bananas that keep longer.

Mr. Ruhlman is the author of several books, most of them about cooking and chefs. He loves grocery stores and rarely passes up the chance to check out an unfamiliar one. It’s a predilection he ascribes to his father, Rip Ruhlman, who did the food shopping for the family and who makes frequent appearances in his son’s latest book, “Grocery: The Buying and Selling of Food in America” (Abrams).

But while the ever-expanding supermarkets that his father shopped still exist — this suburban ShopRite 13 miles from Manhattan is a prime example, selling a wide array of items, from deli cuts and 11 varieties of Cheerios to mops and ironing board covers — they are in the midst of an existential crisis.

Shoppers are increasingly shunning the processed, packaged products that fill most of the shelves in the center of the store. Instead, they are hunting the perimeter for fresh fruits and vegetables, yogurts and cheeses, and prepared foods that go way beyond the traditional rotisserie chicken.

Competition is fierce, as retailers like Walmart, Target and 7-Eleven sell groceries, and Amazon and Fresh Direct deliver to the doorstep. Many of the hottest brands sell directly to consumers through websites and subscription services, cutting out stores altogether.

Walmart, long the lowest-price grocery option, recently announced that it would offer even lower prices, a response to the growth of sharp-penciled European competitors like Aldi and Lidl. And Whole Foods Market, once the darling of the industry, has struggled over the past few years as traditional grocers like Kroger and Safeway have added organic products and upgraded their produce departments.Nielsen, a research and consulting firm, said last month that for the first time in a decade, shoppers were making more trips to stores, but coming out with less in their baskets. “They’re not stockpiling their pantries as much,” said Jordan Rost, the company’s vice president for consumer insights. “They’re really buying more fresh produce and prepared meals.”None of this comes as a surprise to Mr. Ruhlman, 53, who grew up in the Cleveland area and just moved to Manhattan to join the novelist Ann Hood, whom he married last month. His new book is as much an indictment of the traditional supermarket’s role in American unhealthiness as it is about the evolution of the model.

“Our food is making us sick,” he said. “Here we have candy bars masquerading as cereal bars — no wonder we’re confused by our food.”

He picked up a Special K Caramel Coconut Chewy Snack Bar. “You think Special K is healthy because it tastes so bad,” Mr. Ruhlman said. “But one of these has seven grams of sugar in it, meaning it’s 25 percent sugar.”

That brought us to the cereal aisle, which Mr. Ruhlman considers the worst in the grocery store; one chapter in his book is titled “Breakfast: The Most Dangerous Meal of the Day.”“Cereal has this healthy halo around it, and it’s anything but healthy,” he said. Much of it is what he calls “stripped carbs,” or rice, wheat and oats from which manufacturers have removed the germ and bran because the oils in them would go rancid sitting for months on the grocery shelves.

“Our bodies convert those simple carbohydrates into sugar, and guess what most of the rest of cereal is?” he said. “Sugar, either as sugar or corn syrup or fructose or sucrose or some other sugar derivative.”

A few aisles over, Perfect Size for One, a new Duncan Hines mix that makes a single cupcake in a mug using a microwave, caught his eye, first for its sugar content (35 grams) and then as an example of how supermarkets are trying to reach younger consumers. “And it’s not just millennials — more and more of what gets bought in the supermarket is convenience,” Mr. Ruhlman said. “We’re grab-and-go eaters.”

Mr. Ruhlman pointed to another example, Bumble Bee’s new single-serving tuna in pouches, which come in sriracha, sun-dried tomato and basil, and spicy Thai chile varieties, among others.

“I wonder how you eat this,” he said. “I mean, they do provide a spoon. But who eats tuna with a spoon?”

Beneath nearly every product on these shelves was a label promising a deal: buy one, get one free; 10 for $10. But such enticements no longer have much impact, according to Nielsen, which found that consumer response to them fell 5.3 percent over the past three years.

The growing sales of produce and prepared foods are a silver lining for supermarkets, which make a much higher profit margin from produce — about 40 percent for prepared foods, compared with about 20 percent in the store over all, said Phil Lempert, the grocery-retailing expert who calls himself the Supermarket Guru.

But grocers still face a quandary: how to maintain a huge store whose center is filled with items that are largely out of step with how we eat today, yet are a steady source of slotting fees (to secure the best spots in the store when a product is introduced) and other payments from the companies that produce them.Mr. Ruhlman is as baffled as anyone else about how to make that system work, and Nielsen recently created a group to study the issue. He is sure, though, that a fix is needed. The ShopRite here probably has to ring up at least $750,000 in sales each week to justify its space, he said, “and I just don’t know how you make money here.”

The owner, Vincent LoCurcio, whose grandfather opened the Nutley store with a business partner in 1953, declined to divulge sales figures. He acknowledged that the floor plan of the Nutley store was traditional, but said it was stocked with “modern offerings.” He also noted that customers can shop online and through the ShopRite mobile app, and pick the orders up at the store or have them delivered.

“What’s unique is that we are family-owned, and we deliver a personalized experience in each of our stores,” Mr. LoCurcio said. “It’s hard to find a place where people still know you by name, but we do know many of our customers by name and that’s an important experience we provide for them.”Mr. Ruhlman and I toured the frozen foods section and then, as a test of how up-to-date this ShopRite was, went on a search for kombucha. We had to ask an employee, who at first had trouble understanding what we were looking for. But there it was, a small selection of kombucha drinks in a refrigerated section near juice.

Finally, at the other end of the store, we found ourselves in the prepared foods section. “Typical 1970s salad bar,” Mr. Ruhlman said, “but a nice fish section.” (Nutley’s sizable Asian population may help explain the store’s superior seafood selection and unusual fruits and vegetables. More than two-thirds of the town’s residents, though, are 35 or older and white.)

Mr. Ruhlman predicts that much of what is sold in the center of the store — the cereal, canned soups, detergents and Ziploc bags — will be largely bought online in the not-too-distant future as food shoppers become more accustomed to e-commerce.

To repurpose their acres of space, he says, supermarkets could develop specialties that make them more competitive. He pointed to Kroger’s acquisition this year of Murray’s Cheese, a New York institution

“Think about what that could mean in terms of more people having access to really good cheeses,” he said.

And he believes that many supermarkets will simply get smaller, as people order more online and consumers buy groceries from more places.

For him, the supermarket has lost some of the thrill it once held when he strolled each aisle with his dad. “It just doesn’t have a lot of the stuff that I personally like,” Mr. Ruhlman said. “And it takes too long to get around. I’m exhausted.”