Over the past few years, grocery retailing has undergone a tremendous transformation which was driven mainly by changing consumer characteristics. In order to accommodate these changes, the industry has responded in three ways. The most important of these is the introduction of new technology, particularly efficient consumer response (ECR). The second change has to do with innovations in product and/or service offerings. The final transformation is the organisational restructuring and the increasing number of mergers and acquisitions in the industry at both the manufacturer and retailer levels. The implications of these transformations on the marketing mix, productivity and manufacturer-ratailer relationships are discussed.