(March 6) Arlington, Va., — With traditional supermarkets losing sales to Wal-Mart and other nontraditional retailers, government calculations about food inflation may be overstated, according to a U.S. Department of Agriculture economist.

The technology of how government collects data on retail prices was addressed March 2 at the Agricultural Outlook Forum 2007 by Ephraim Leibtag, economist with the USDA’s Economic Research Service.

Government consumer price indexes may not fully account for the growing market share of club stores and supercenters, because Scantrack data collected by New York-based ACNielsen and InfoScan data from Chicago-based Information Resources Inc. don’t include Wal-Mart, club stores and some other alternative retailers, Leibtag said.

ACNielsen has offered a data product since 1998 that analyzes the grocery buying habits of 65,000 consumers. Those consumers scan what they buy when they bring it home and report it to Nielson, he said. The consumers log what they buy, what they paid and where they buy it.

The data from that more complete picture of consumer habits indicate the market share of traditional supermarkets has declined from 80% in 1998 to about 60% in 2005. On the other hand, the share of market owned by nontraditional retailers increased from 20% to 40%, Leibtag said.

Wal-Mart’s supercenters’ accounted for about 3.2% of the market in 1998 and 13.2% of the food market by 2005. The largest growth for Wal-Mart was in the South, where it grew from 20% to 40%, and the Midwest, where Wal-Mart’s share of the market grew from 16% to 32%.

The implications of the growth in nontraditional retailers — particularly Wal-Mart — reach to the issue of how the government calculates food inflation. Because current indexes don’t include Wal-Mart, Target, club stores or Aldi, Leibtag said prices may be overstated.