Globally, most coffee for in-home c

Globally, most coffee for in-home consumption
is purchased in supermarkets. The
food retail sector is highly concentrated in the
United States, the United Kingdom and
Northern Europe and plays a dominant role in
the food marketing chain (van Dijk et al.,
1998). Yet, through consolidation and with
massive investment in advertising their brands,
roasters have managed to keep control of the
coffee chain (van Dijk et al., 1998). This happened
in spite of the development of private
coffee labels by supermarkets. As a result, supermarkets’
retail margins for coffee have remained
generally lower than for the average
food portfolio. In some countries, such as the
United States, retailers sell coffee even at a loss
in order to ‘‘generate traffic.’’ Retailers need to
stock coffee because consumers expect them to
do so. They can attract customers with relatively
cheap coffee and entice them to buy
other (higher-margin) items during their visit
(Dicum & Luttinger, 1999; Pendergrast, 2001;
van Dijk et al., 1998). Furthermore, coffee sales
have recently moved into even lower profit
margin outlets, such as warehouse and discount
stores. In 1997, 10% of total retail coffee
purchases in the United States were made at
Wal–Mart (Dicum & Luttinger, 1999, pp. 114,
159).