Grocery Stores

The 38,500 grocery store firms in the US sell non-perishable dry foods and an extensive array of perishable products; including meat, produce, dairy, bakery, frozen, and several specialty food related products or services. Grocery retail is a low margin, high volume business. The industry is concentrated, as the largest 50 firms account for 75% of industry sales.

Stores Face Intense Competition

Competition in the crowded retail grocery trade is intense.

Reliance On Information Systems

Grocery retailers depend on large, complex information technology systems to manage their business operations.

Sep 14, 2026 - Lawsuit Over Plan For Municipal Grocery Stores

• Local business groups representing local food retailers have sued New York City and its mayor over a plan to open five municipal grocery stores, The Wall Street Journal reports. The city would subsidize the stores, provide free rent, and offer a core basket of groceries at prices 30% below typical retail levels, which could increase competitive pressure on supermarkets, grocery stores, and bodegas, particularly smaller operators with thin margins. The city has allocated $70 million to the initiative and expects the first location to open in late 2027. Plaintiffs argue that subsidized stores would create unfair competition and could force some independent grocers out of business. City officials maintain that five municipal stores in a market with over 1,000 grocery stores would not significantly harm existing operators. If successful, the model could also attract interest from other cities, potentially creating new competition for private grocers.
• Grocery stores are intensifying price competition as consumers cut back on spending, The New York Times reported in July. The strategy however is more likely to pressure store margins rather than lower overall grocery bills. Chains including Walmart, Kroger, Costco, Stop & Shop, Target, and Whole Foods are reducing prices on selected staple items and expanding private-label offerings to attract budget-conscious shoppers. Retailers are responding to weaker sales volumes, rising competition from discount grocers such as Aldi, and consumers making fewer shopping trips because of inflation, reduced SNAP benefits, high gasoline prices, and increased use of GLP-1 weight-loss drugs. While targeted discounts have helped boost basket sizes at some chains, overall food prices are still expected to rise this year. Prices across all food categories are expected to rise 3.2% in 2026, according to the USDA’s Economic Research Service.
• In the latest example of ongoing consolidation in the US grocery industry, Kroger has moved to acquire Giant Eagle for $1.65 billion, Supermarket News reports. The proposed acquisition of Giant Eagle by the nation’s largest traditional supermarket chain would expand Kroger’s reach into western Pennsylvania and strengthen its presence in Ohio, West Virginia, Maryland, and Indiana by adding 197 supermarkets, 11 pharmacies, and about $9 billion in annual sales. Kroger expects to combine Giant Eagle's strong regional brand, private-label products, and loyalty program with its own e-commerce, data analytics, and personalization capabilities to improve efficiency and the customer experience. The proposed merger highlights the growing scale required to compete on price, technology, and digital services. Ongoing consolidation could increase competitive pressure on regional and independent grocers, which may struggle to match the purchasing power, supply chain efficiencies, and technology investments of larger national chains.
• Producer prices for grocery stores rose 4.3% in July compared to a year ago, after rising 3.4% in the previous July-to-July annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices for grocery stores are at record high levels amid rising procurement and labor costs. In July, the Producer Price Index for All Foods stood 21% above its reading five years ago but declined 2% from July 2025, per the BLS. Employment by grocery stores remained flat year over year in June, while the average industry wage rose 4.3% over the same period to a high of $18.74 per hour, BLS data show.

Industry size & Structure

The average grocery store employs 68 workers and generates over $21.1 million in annual revenue.

• The retail grocery business is a highly competitive, diversified industry with about 38,500 firms employing 2.6 million workers and annual sales of $812.7 billion.
• The grocery store industry is concentrated, as the largest 50 firms operate over 18,575 stores and account for 75% of industry sales.
• The average store is about 42,275 square feet, but large supercenters can exceed 180,000 square feet.
• On average, a grocery store carries about 33,250 items, or Stock Keeping Units (SKUs).
• Median store sales are about $668,377 per week (about $34.7 million per year).
• The average net profit for food retailers in 2025 was 2.1%.
• The average US household spends more than $6,000 on groceries annually, or over $500 per month, according to the US Bureau of Labor Statistics.
• In 2025, supermarket shoppers sent $49.06 per transaction in-store and $106 per transaction online.