Organic Food Trends:
While these two factors affect the source of organic food, it is the retailers themselves who may trigger the fastest and longest-lasting drop in organic food prices. In response to the decline of sales, a looming price war may push organic food prices down to a level comparable to regular foods. The niche of people who are passionate about their organic foods will remain strong regardless of the price. When they were hot just a few months ago, many grocers and health food stores dedicated more space to stay ahead of the demand. Now that the demand has taken a dive, retailers will be trying to gain a stronger share of the shrinking market. Even Whole Foods, known for higher quality and prices to match, is reducing prices and trying to change their public image. It is in this price war that many who have recently abandoned organic foods may return for the same reason that they left: price. The actual cost difference between organic and normal foods is much lower than the retail price difference because perceptions have allowed the premium rates. As perceptions change, grocers will have to sell their normally high-profit organic foods at or below the cost of their normal counterparts.
Figure 5.1: UK organic food and drink: total retail sales and total imports 2002/03
5.13 Table 5.5 shows the most recent data we were able to secure on the percentage share of trade between the multiple retailers for organic and the overall grocery market (2000). The data indicate that Sainsbury's, Tesco, Waitrose and Safeway account for most UK organic sales. In 2003, two multiples, Sainsbury's and Tesco were responsible for 27% and 27.5% respectively of UK organic product sales. Table 5.5: Multiple retailers' share of trade - Total Organic vs Retailer Share Track (% share of spend, during 52 weeks ending 17 Sept. 2000)
Please join StudyMode to read the full document