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
Jul 14, 2024 - Record High Producer Prices
- Producer prices for grocery stores rose 6.4% in May compared to a year ago after rising nearly 12% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. May marked a new high for grocery store producer prices, which have risen 33% since the start of 2021. Meanwhile, average wages at grocery stores continue their steady climb, rising 4.3% in May year over year to $17.74 per hour, another new high for the industry. Employment ticked up 1.1% over the same period, according to the BLS.
- The nation’s stubborn inflation rate fell in June for the first time since the start of the pandemic, while grocery prices remained relatively stable, Supermarket News reports. The Consumer Price Index, a measurement of the average price change for a commonly purchased basket of goods and services, dropped 0.1% from May, according to the US Bureau of Labor Statistics. Food-at-home prices inched up 0.1% versus the prior month and 1.1% year over year. Most food categories saw little change on a month-to-month basis. The dairy and related products index was up 0.6% month-over-month, while the index for fruits and vegetables fell 0.5%. Meats, poultry, fish, and eggs rose 0.2% for the month, while cereal and bakery product prices dipped 0.1%, per the BLS.
- As America has grown more diverse, so has the US grocery store landscape, with Asian grocery chains expanding and changing how Americans shop and eat, The New York Times reports. Asian grocery stores were once a niche business dominated by mom-and-pop establishments. Today, they are billion-dollar businesses, according to NYT. Large Asian grocery chains include H Mart, with 96 stores and $2 billion in sales; Patel Brothers, with 52 locations in 20 states; 99 Ranch Market (62 stores in 11 states); and online Asian food store Weee!, valued at $4.1 billion, NYT reports. Asian grocery chains cater to America’s fastest-growing ethnic group – Asian Americans – and non-Asians who enjoy the cuisine. Despite their recent growth, Asian American grocers still represent less than one percent of the total US grocery business but exercise an outsized impact as they dictate which products traditional and big-box grocery chains stock, per NYT.
- US grocery sales are projected to fall over the next five years compared to the last five, with ecommerce outperforming in-person sales, according to the US eGrocery Sales Forecast: 2024-28, from Brick Meets Click and Mercatus. Overall grocery sales, and ecommerce in particular, surged during the pandemic and its aftermath as record-high food inflation took hold. Both inflation and consumers' affinity for online grocery shopping are proving sticky. According to the new report, ecommerce is projected to increase at a compound annual growth rate (CAGR) of 4.5% versus a 1.3% rate for in-person grocery shopping. Total online sales could reach $120 billion by the end of 2028 and account for 12.7% of the total grocery sales in the US, according to the Brick Meets Click forecast. Delivery and pickup sales combined will represent 10.7% of total grocery sales in five years, per the report.
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