Grocery Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 39,900 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 retail grocery trade is fierce and intense.

Industry size & Structure

The average grocery store employs 64-65 workers and generates over $18 million in annual revenue.

    • The retail grocery business is a highly competitive, diversified industry with about 39,900 firms employing 2.5 million workers, and annual sales of $741 billion.
    • There are about 65,200 grocery stores in the US. The average store is 42,415 square feet, but large supercenters can exceed 100,000 square feet.
    • The grocery store industry is concentrated, as the largest 50 firms operate over 17,600 stores and account for 73% of industry sales.
    • On average, a grocery store carries about 40,000 items, or Stock Keeping Units (SKU's).
    • The median store sales are about $555,000 per week (about $28.8 million per year).
    • Customers typically make 1-2 trips to a grocery store each week. The average US household spends $120 per week on groceries ($106 for households without children; $160 for households with children).
                                  Industry Forecast
                                  Grocery Stores Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 3, 2022 - Food Prices Skyrocket
                                  • Food prices have been rising since mid-2021, but they are expected to increase further amid the Ukraine war and rising interest rates. On a seasonally adjusted basis, US food manufacturers’ prices rose 1.5% in March 2022 compared to the prior month, but unadjusted food prices grew 14.6% over March 2021, according to the US Bureau of Labor Statistics. Food-at-from-home prices are expected to rise between 3% and 4% for all of 2022 compared to 2021, according to the food price outlook released in March by the US Department of Agriculture. All food categories are expected to see higher prices throughout the remainder of 2022, and at least half will see double-digit price increases, including beef and veal (+16.2%), pork (+14%), poultry (+12.5%), fats and oils (+11.7%), eggs (+11.4%), and fresh fruits (+10.6%)
                                  • As food prices have gone up, grocery chains have benefitted from consumers absorbing higher prices. However, as year-over-year at-home food prices rose 10% in March, some industry watchers suggest consumers may have reached an inflection point and will begin looking for bargains and spending less. In the early days of the pandemic, high demand and supply chain problems kept promotional deals to a minimum, but some industry insiders feel consumers will increasingly shift their spending to bargain brands and low-cost retailers if high prices persist.
                                  • Retailers, including grocery stores, may need to increase investment in digital payment technology. There has been a permanent, global shift by consumers to digital payments, according to Al Kelly, the CEO of payments processing giant Visa. Kelly cites the coronavirus pandemic as a key reason that cash-only establishments began accepting digital transactions. More consumers have become comfortable purchasing routine items online or with their smartphones to avoid risky in-person interactions. The switch has been most evident in parts of the economy that have traditionally been cash-heavy, such as grocery stores, coffee shops, and bars.
                                  • Retail sales in the grocery store industry increased 1.3% in value month over month on an adjusted basis and rose 9% in value year over year on an unadjusted basis in March.
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