Today's grocery retailers and distributors find themselves in one heck of a food fight.They battle miniscule profit margins (approximately 1.5%), high labor costs, a wide range of constantly changing products (many with limited shelf life), and proliferation of stock keeping units (SKUs). They also contend with growing competition from other food sellers like mass merchandisers, drug stores, wholesale clubs and convenience stores. One of the biggest challengers is mass merchandiser Wal-Mart that last year became the largest grocery retailer in the United States. While maintaining its lead in grocery industry sales―with more than $53 billion in 2002―Wal-Mart and other non-traditional food sellers continue to swallow market share from the top three traditional grocery chains (Kroger Co., Albertsons Inc. and Safeway Inc.), while putting some regional independent grocers out of business.
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