In a December 2023 Investopedia article written by Christina Majaskie and reviewed by Samantha Silberstein, CFP, CSLP and EA, titled “American vs. European Choices: What’s the Distinction?” Majaskie notes that American and European inventory choices have comparable traits, however their variations are essential.
“House owners of American choices could train at any time earlier than the choice expires. European choices can solely be exercised at expiration,” Majaskie writes. “Most fairness choices are American-style choices, however many broad-based fairness indices have actively traded European-style choices, together with the S&P 500.”
Equally, for U.S. specialty retailers working within the pure and natural area, though extremely aggressive, this grocery market has an excessive amount of selection, consultants notice.
“Specialty retailers within the pure and natural area (which falls throughout the Small Native Grocery class based on Euromonitor’s taxonomy) have skilled decrease progress within the final yr relative to hypermarket, discounter, grocery store and warehouse membership rivals as a result of, for many U.S. customers of grocery, worth and comfort are high of thoughts on the subject of buying,” clarify Leah Boston, senior analyst at Euromonitor Worldwide; Nik Allen, advisor; and Nina Valenti, analysis analyst at Euromonitor, Chicago.
“U.S. customers are drawn to merchandise containing pure and natural components, however these choices are available from a discounter, equivalent to Aldi, or a warehouse membership competitor like Costco,” the consultants proceed. “Progress in personal label amongst main grocery retailers, which incorporates natural and pure choices, has additionally cannibalized gross sales from small native grocers. As grocery costs have risen, we’ve seen important funding in personal label on the a part of main retailers like Walmart, Costco and Kroger, as a option to retain margin whereas providing decrease priced items to customers.”
Moreover, as described above, inflation developments are motivating customers to hunt out extra value-oriented retail choices, the Euromonitor consultants notice.
“It’s arduous for small specialty retailers targeted on pure and natural to compete with bigger chains that provide reductions related to loyalty or membership applications, free or discounted supply, and BOPIS (purchase on-line, pick-up in retailer) choices, particularly when these bigger chains are additionally stocking stock with pure and natural product claims,” Boston, Allen and Valenti clarify.
Furthermore, margins are particularly tight for specialty retailers whereas bigger firms have much more buying-power, they notice. “The burden of elevated value usually will get handed on to the buyer within the case of specialty retailers whereas bigger grocers can replicate that again on suppliers,” the consultants say.
In Mintel’s June “Grocery Retailing – US – 2025” report, Katie Hansen, senior analyst for retail and eCommerce at Mintel, Chicago, notes that tariffs, expertise and tastes are reworking the grocery panorama as customers adapt to costs and search customized buying experiences.
“Customers are more and more adapting to increased grocery costs, with 49% in search of higher offers and 35% switching to cheaper manufacturers,” the report states. “This displays a rising emphasis on worth and affordability, prompting retailers to boost loyalty applications and promotional ways to retain client curiosity.”
Additional expertise, notably synthetic intelligence (AI), is gaining momentum with many customers optimistic about its influence in retail, based on the report.
“AI will supply grocers the chance for enhanced personalization, enhance operational capabilities and provides customers actual time perception into obtainable merchandise on the cabinets,” it states.
So far as tariffs impacting customers and grocers alike, the report factors out that tariffs already are impacting the grocery market, affecting pricing and provide chains.
“With client confidence at low ranges, retailers should navigate these challenges by specializing in cost-effective options and clear pricing methods to keep up client confidence,” it states.
Euromonitor’s Boston, Allen and Valenti pinpoint the influence eCommerce is having on pure and natural retailers.
“eCommerce has had an infinite influence on the grocery area typically as customers have gravitated to the comfort of BOPIS or supply,” the consultants clarify. “Marketplaces equivalent to Amazon enable customers to purchase shelf secure meals merchandise of every kind in bulk.
“To compete, grocery retailers throughout the board have to both spend money on the infrastructure wanted to accommodate eCommerce or companion with a supply supplier,” they proceed. “The unfold of social commerce, particularly related to the advertising and marketing of merchandise making pure or natural claims, has additionally cannibalized gross sales from conventional brick and mortar shops.”
So far as different developments influencing the pure and natural retailer section, Boston, Allen and Valenti notice that contrasting U.S. laws have impacted the grocery market as a complete.
“The claims of ‘pure’ and ‘natural,’ disparately regulated and outlined throughout the U.S. Division of Agriculture (USDA) and Meals & Drug Administration (FDA) regulatory frameworks, have change into so commonplace within the advertising and marketing of meals within the U.S., and so prevalent in personal label merchandise, that their associations with wholesome residing as we speak are much less significant,” they clarify. “Ingredient claims (equivalent to ‘free from’) and performance claims are a extra promising option to differentiate for retailers of pure and natural meals.
“The MAHA motion within the U.S. has additionally contributed to a basic mistrust of presidency organizations, which has additional undercut the credibility of product claims linked to wholesome outcomes,” the consultants proceed. “It’s usually an issue of diet literacy amongst customers, and their doubt about how complete the protection of claims is throughout the regulatory framework.
In sum, Boston, Allen and Valenti add that given the array of retail selection, customers in search of extra distinctive decisions for pure or natural meals will go the place they really feel that their added spend is justified, noting that retailers specializing on this area “should have a really clear and credible worth proposition.”
Pure and natural drinks present broad attain
With the useful beverage pattern ever rising, consultants spotlight the classes which are thriving within the pure and natural retail area and why they carry out so properly.
“Unpasteurized and uncooked juices, uncooked milk (the place authorized), and naturally fermented merchandise are all choices that thrive in pure and natural retailers,” Euromonitors Boston, Allen and Valenti clarify. “These merchandise aren’t shelf secure and require refrigeration, so they’re extra troublesome for a web based retailer like Amazon to inventory.
“These are additionally the sorts of merchandise which will get misplaced inside a standard grocery aisle except merchandised in an attention-grabbing manner, through a refrigerated endcap maybe,” they proceed. “Inside tea, there’s traditionally an affiliation with smaller, extra native retail, particularly if customers search to purchase it in unfastened leaf type.”
Boston, Allen and Valenti add that inside drinks, it’s price noting what already has saturated the U.S. market.
“Kombucha, for instance, can now be present in comfort shops,” they are saying. “There are branded contemporary pressed juices equivalent to Odwalla and Bolthouse Farms, which are bought throughout main grocery store chains.”
Though pure and natural retails are caught in the midst of main market shifts, Boston, Allen and Valenti notice that there nonetheless are alternatives for these specialty retailers to extend their gross sales.
“Erewhon, a Los Angeles primarily based specialty grocer targeted on pure and natural merchandise, is a powerful instance of how pure and natural grocery retailers could discover a aggressive area of interest,” they are saying. “The model at present operates 10 places throughout Los Angeles County. Erewhon’s model markets an aspirational life-style. Its costs are excessive, reflecting an affiliation of well being and wellness with luxurious as a lot as high quality.
“As already acknowledged above, the discourse round pure and natural resonates much less with U.S. customers as we speak,” the consultants proceed. “What Erewhon has finished so properly is to affiliate its choices with wellness, which is a much less particular however a lot broader pitch tying meals to life-style. Erewhon makes its brick-and-mortar retailer an expertise, full with sharply curated aisles and social media worthy smoothies, but it surely additionally presents supply and an eCommerce possibility — eCommerce is obtainable for a restricted collection of shelf secure stock.”
