Grocery Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 38,200 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 73% of industry sales.
Reliance On Information Systems
Grocery retailers depend on large, complex information technology systems to manage their business operations.
Stores Face Intense Competition
Competition in the crowded retail grocery trade is intense.
Industry size & Structure
The average grocery store employs 68 workers and generates over $21.9 million in annual revenue.
- The retail grocery business is a highly competitive, diversified industry with about 38,200 firms employing 2.6 million workers and annual sales of $835 billion.
- The grocery store industry is concentrated, as the largest 50 firms operate over 17,650 stores and account for 73% of industry sales.
- The average store is 48,000 square feet, but large supercenters can exceed 180,000 square feet.
- On average, a grocery store carries about 31,530 items, or Stock Keeping Units (SKUs).
- The median store sales are about $596,000 per week (about $29.1 million per year).
- Customers typically make 1-2 trips to a grocery store each week. The average US household spends about $1,080 on groceries a month, according to the Bureau of Labor Statistics.
Industry Forecast
Grocery Stores Industry Growth
Recent Developments
Mar 14, 2025 - Tariffs May Raise Already-High Food Prices
- According to the Food Industry Association (FMI), the industry has very thin profit margins – just 1.6% for retailers and 7.5% for food manufacturers. Amid the record high food price inflation of the post-pandemic years, food retailers have struggled to protect margins while keeping prices low. Now, facing significant new cost pressures from import tariffs on food from Canada and Mexico, the grocery industry may have little choice but to pass on import taxes to maintain their margins and stay in business. More than three-quarters (76%) of shoppers surveyed plan to change their shopping habits to brace for higher prices, according to data analytics company Numerator. In addition to higher prices, retailers and consumers are worried about product availability being impacted by tariffs on imports to the US.
- The USDA has unveiled a $1 billion strategy to combat avian flu, protect the US poultry industry, and lower egg prices. The plan was announced after the department predicted retail egg prices would rise more than 40% this year. Its five-pronged strategy includes an additional $500 million for biosecurity measures, $400 million in financial relief for affected farmers, and $100 million for vaccine research, action to reduce regulatory burdens, and exploring options for temporarily increasing egg imports and decreasing exports. Bird flu has plagued the grocery and food retail industry for three years, driving up egg prices and causing shortages at grocery stores. In March, supermarket giant Kroger said the bird-flu outbreak caused a 70% increase in the price of eggs during the fourth quarter. Inflation, tariff threats, and egg prices are contributing to the grocery industry’s conservative outlook for the year ahead.
- New research from Cornell University shows beer drives grocery store sales and supports the relaxation of laws to allow alcoholic beverages to be sold in grocery stores, Food Manufacturing reports. The Cornell study found that when a grocery store starts selling beer, beer-chasing households visited a grocery store 3.6% more often and increased their grocery store expenditures by 8% per month. Moreover, shoppers increased their spending on related categories (those items likely to be purchased with beer) including snacks, cheese, deli items and soda by 17%. The research, which used nationally representative data at the store and household levels, found that the introduction of beer into grocery stores in Colorado – which started allowing grocery stores to sell full-strength beer in 2019 – can lead to fundamental changes in how people shop, where they shop and what they buy, says Bradley J. Rickard, professor of food and agricultural economics Cornell University.
- President-elect Donald Trump, who campaigned on bringing down grocery prices, walked back that promise in a December interview with Time magazine saying it’s “hard to bring things down once they’re up.” The USDA is predicting prices for all food to increase 1.9% in 2025, with food-at-home prices predicted to rise 0.8%, a cooler rate of inflation than in recent years but still an increase. Last year, according to the USDA, prices for all food are predicted to rise 2.3%, with food-at-home prices expected to increase 1.2%. With food prices continuing to rise, grocery stores that help customers save money through lower prices, promotions, and rewards will outperform their competition. Meanwhile, Trump’s tariff threat on imports could result in a significant price jump if US industries can’t meet the demand, causing food distributors to rely on exports and pass the price increases on to customers.
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