The growth of fresh food retail formats and the coming attraction of online shopping were two trends highlighted in a web seminar hosted by The Food Institute and Willard Bishop Consulting.

In the June 19 presentation called  “The Future of Food Retailing,” Jim Hertel, managing partner with Barrington, Ill.-based Willard Bishop, said retailers can’t rely on high inflation to provide sales growth for their operations. Recent consumer price trends show only 1% inflation compared with a year ago, he said.

Food retailing in general is a stable category, with growth only coming from food inflation and population growth. Within the category, however, Hertel said there is much turmoil caused by consumer shifts. Baby boomers, with incomes falling, are fading in importance and convenience-oriented millennial consumers are on the rise, he aid.

These shifts are providing winners and losers among retailers and their suppliers, he said. “The optimistic note for today is that real growth and not just inflation is available today for food retailers and manufacturers who know that to look for and embrace the future,” he said. Hertel said retailers should develop a range of possible responses to trends and pursue responses that make sense for them. The future will reward retailers with a bias toward action, he said.

One overlooked growth opportunity for retailers is e-commerce, he said. “Amazon is not the only e-commerce format that is likely to succeed going forward,” he said. E-commerce food sales are expected to grow `12.1% yearly.

Traditional supermarket dollars increased 3.4% in 2012, but the market share of those stores remained steady at 46.5%. Hertel said “fresh” format sales increases significantly led all formats, he said. Fresh format sales rose 22.5% to $12.7 billion in 2012. Whole Foods enjoyed a same-store sales increase of 8.7%, followed by The Fresh Market with a 5.7% gain in 2012. The market share of fresh format stores was still quite low, at 1.1% in 2012, according to Willard Bishop statistics.

Limited assortment stores, led by Aldi, showed a 4.4% increase in sales to $29.9 billion, according to Willard Bishop statistics. Limited assortment stores had a market share of 2.7% in 2012, according to Willard Bishop.

Persistent unemployment, slow growth and a squeezed middle classes make it a tough environment for retailers, he said. In that context, he said retail formats that are expanding include extreme value formats, fresh, natural and organic operators and drug stores.

Willard Bishop predicts fresh format sales will 13.4% yearly, with aggressive new store plans and same-store sales growth above 5% per year. Extreme value stores are projected to grow 6.2% on a yearly basis, with increasing numbers of dollar stores and gains in discount retailer Aldi under the radar. Aldi is adding about 80 stores per year, mostly in mid-upscale neighborhoods.

In a question and answer session, Hertel said the trend of local food presents retailers with a question of what local means to their consumers.

“Different retailers are tying to balance how far out do they go (for product_ and credibly claim local,” he said. “What truly is local? Is it 50 miles, 100 miles, or within that state?”

Hertel and said that local food appeals to the baby boomer demographic and also can satisfy the demand for organic produce from millennial consumers.

One challenges for creating a “local food” identity is sourcing produce during the winter. Hertel said that companies who focus on aggregating local produce production in a particular market can be a great resource for retailers, he said.

“For all the wrinkles we talked about with local food, someone who can specialize in that and off-load a lot of the problems and frustrations from the retailers should have tremendous opportunities,” he said.