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 $164 per week on groceries with households with children spending considerably more.
                                  Industry Forecast
                                  Grocery Stores Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jun 14, 2024 - Wages Hit New High in April
                                  • Employment by grocery stores ticked up 1.1% in April compared to a year ago, while average industry wages rose 4.6% over the same period to $17.67 per hour, a new high for the industry, according to the latest US Bureau of Labor Statistics data. Meanwhile, producer prices for grocery stores rose 3.8% in April compared to a year ago after jumping 13.9% in the previous annual comparison, according to the BLS. Rising consumer spending – up 3.1% in March year over year – is supporting higher prices at the grocery store, with sales posting year-over-year gains in March.
                                  • 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.
                                  • In April, the Special Supplemental Nutrition Program for Women, Infants, and Children (aka WIC) received its first update in roughly a decade, AP News reports. The newly updated federal program for low-income mothers incentivizes fruit and vegetable purchases while expanding access to culturally diverse offerings. Under the new rules, fruits and vegetable vouchers in 2024 will provide $26 per month for kids ages 1 through 4, $47 per month for pregnant and postpartum women, and $52 for breastfeeding women. “It places a heavy emphasis on fruits and vegetables, which we think is an important component of a healthy diet,” said Agriculture Secretary Tom Vilsack. The updates also expand access to global whole grains like quinoa, wild rice, and millet and to foods such as teff and whole wheat naan and remove or reduce monthly allowances for juice and cut back on allowances for milk, according to the USDA.
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