By 2010 existing grocery store formats will have evolved into something completely different. IGD envisages that UK consumers will be shopping in destination stores, meal solution centres, discounters, neighbourhood retailers or from their own homes/offices. It's an end to the well worn pattern of superstores, supermarkets, discounters and neighbourhood retailers ­ including both the convenience sector and specialists such as bakers. Factors outside the grocery industry will play a major role in determining what these new stores will be like and what level of market share they command. The presence or absence of planning regulations will both encourage and deter the development of the various formats. E-commerce is already having a significant effect. Meanwhile, internal industry demands such as the search for economies of scale and need to meet shareholder expectations are driving retailers to grow and innovate. Destination stores will be the ultimate in large scale retailing ­ 26-34% of the market. They will provide all shopping needs under one roof but also include cinemas, restaurants and even doctors' surgeries. Economies of scale will be vital and global players will have a big advantage, perhaps owning their own centres. Meal solution centres will be located in the high street and near offices, railway stations and road junctions. The focus will be quality, freshness and convenience, a cross between McDonald's and Fortnum & Mason. With a mix of ready to eat and easy to prepare meals, they will eliminate the need to plan ahead and will take between 20% and 24% of the market. This segment will be less price sensitive, and speed of reaction will be more important than scale. Within the current market, it is conceivable Waitrose and Marks and Spencer will vigorously pursue this segment. Formats such as Tesco Metro and Asda Fresh could also be adapted to meal solution centres. The discount sector ­ currently 2% of the grocery market ­ will continue to serve the needs of the most price conscious consumers, especially those who rely on public transport. In the US, many small discount stores thrive in the shadow of a Wal-Mart. Some discounters will bargain hunt by spot buying on the open market, providing little in the way of continuity. It is unlikely discounters will be able to grow market share to a significant level, due to both lack of appeal to a majority of consumers, and the aggressive response from other retailers, including the introduction of value lines. The demand for impulse and emergency items will continue to be met by neighbourhood stores. Service and good range management will be more important than price, and so companies will not need to be global to compete successfully in this segment. In the UK these retailers will continue to account for a significant sector of the market (17-24%). The future for remote shopping remains the hardest to call, but ultimately it is this format that will offer consumers complete convenience. Current e-shopping options do not meet this need yet, but have the potential. Semi-solutions, such as delivering to the workplace, or home ordering for collection, may take hold. Without a proven business model for remote shopping, it is more difficult to judge whether global or local players will dominate. A global retailer will enjoy better buying terms and should provide a broader range. But local operators might be more responsive to customers and, if they focus only on this form of retailing, might build a lower cost infrastructure. The biggest uncertainty factor in the IGD's forecasting is in the development of the remote shopping segment (23-27%). Its size will directly impact on the size and development of the other market segments. By 2010, it is widely expected all homes receiving tv signals will be doing so by digital means, and therefore by implication will have access to tv shopping channels. The other major factor in the development of these segments is planning restrictions. It seems unlikely any changes to the guidelines will occur for the foreseeable future. However, one of the recommendations of the Competition Commission could be to ease restrictions in certain areas of the UK to increase local competition. This could pave the way for rapid development of destination stores throughout the UK. The success of Asda hypermarkets and Tesco Extra confirms shoppers like access to a wide range of products and stores at one venue or outlet. Retailers will need to align their future business strategies within one or more of these new segments. Operators still pursuing older sectors may not survive as the market restructures around them. Clearly, the changes in the retail market structure will have implications for suppliers. Each segment will require a different approach. This presents an opportunity. The proactive supplier can tailor business to meet and exceed the changing demands of both retailers and end consumers. {{MANAGEMENT FEATURE }}