SACRAMENTO, CA - The nation's grocery competition is heating up, and supermarkets are fighting for market share against nontraditional retailers, the Sacramento Business Journal reports.

Walmart and Target have begun focusing on their grocery sales, with both companies expanding food sections at Sacramento stores and elsewhere. And nationally, Walgreen, CVS, dollar stores and 7-Eleven have been looking to groceries and prepared foods to increase sales. As a result, supermarkets are losing market share and face an extremely competitive future.

"Walmart??s going huge next year," said Garrick Brown, research director at Colliers International in Sacramento.

Known for its huge stores that average 100,000 square feet or more, Walmart is pursuing several hundred stores as small as 20,000 feet, with groceries playing a major role in that expansion. For the fiscal year ended January 31, grocery sales accounted for more than half of Walmart's U.S. sales.

"They??re looking for total market domination," Brown said. "It??s a genius move on their part. Do I think they will further dominate the market? Yes, I do."

"[We will continue] to consider formats that will put us closer to our customers," said Walmart spokesman Steven Restivo. "We??ll continue to expand into new channels so customers can shop and experience Walmart when, where and how they want."

Those smaller formats include Supermercade de Walmart, a Hispanic-focused concept in Phoenix and Houston, and Marketside in the Southwest.

Target is spending $1 billion to remodel roughly 340 stores this year, with changes that include an expanded grocery section featuring fresh produce, packaged beef, and ground chicken.

With more than 70 stores combined in the Sacramento region, Walgreen and CVS have also expanded their food offerings, most in the grab-and-go category. CVS has begun reformatting some of its urban stores to accommodate salads, sandwiches, frozen food, and prepared food.

Walgreen, too, is looking at fresh food options, such as salads, wraps, sandwiches, and take-and-bake pizzas.

And 7-Eleven said last December that it would quadruple its Northern California store presence while expanding its selection of fresh produce and freshly prepared foods.

"You??ve just got everybody jumping into that game," Brown said. "It??s going to be toughest on those guys in the middle ?" the Safeways, the Raley??s."