Specialty Food 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 19,000 specialty foods stores in the US sell produce, seafood, grocery, meat and poultry, bakery, prepared foods, specialty cheese, coffee and tea, nutritional supplements, vitamins, educational products, floral, and even certain household products. Most specialty food stores offer products deemed to be higher quality and premium-priced than traditional grocery stores.
Dependance On Economic Conditions
Specialty food customers typically are more affluent (household income of $75,000) than the average grocery store shopper.
Perishable Products
Specialty food stores typically carry more perishable products than traditional food retailers, often comprising two-thirds or more of their product offerings.
Industry size & Structure
A typical specialty food retailer operates out of a single location, employs 8-9 workers, and generates about $1.4 million annually.
- The specialty food stores industry consists of 19,000 companies that employ 160,000 workers and generate about $27 billion annually.
- Sales by US specialty foods stores increased by 5.2% in 2022 compared to 2021 and reached $28.4 billion.
- Traditional grocery stores and supermarkets are the largest sellers of specialty foods, with about 70% of sales.
- Sales of specialty foods and beverages across all retail and food services are expected to reach $207 billion in 2023.
- Of organic food sales, 56% are sold through traditional food retailers and 32% are through natural food/health stores.
- Specialty foods represent about 22% of all food sales at retail.
- Most specialty food stores are small, single-unit locations, but some specialty food retailers are relatively large, multi-state operations, such as Whole Foods Markets, Sprouts Farmers Market, and Trader Joe's.
Industry Forecast
Specialty Food Stores Industry Growth
Recent Developments
Mar 13, 2025 - Tariffs Threaten Margins, Sales
- The food industry has very thin profit margins – just 1.6% for retailers and 7.5% for food manufacturers -- according to the Food Industry Association (FMI). Amid the record high food price inflation of recent years, specialty food stores have struggled to protect their margins while keeping prices low. Now, faced with significant new cost pressures from import tariffs, the food industry may have little choice but to raise prices to maintain their margins and stay in business. Specialty food stores are especially vulnerable to import tariffs because many of the products they sell are imported. 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.
- Rising concern among consumers for their own health and that of the planet is driving outsized gains in sales of organic produce compared to conventionally-grown fruits and vegetables, Supermarket News reports. For the 52 weeks ending December 1, sales of fresh organic produce – a key product category for many specialty food retailers – rose 7.2% compared to 3.3% for conventional selections, according to new data from market research firm Circana. While more consumers across all segments are buying organic produce, boomers (persons aged 61 to 79 in 2025) account for the greatest share of organic produce spending (34%), followed closely by millennials/Gen Y (ages 29 to 44, 33%), and Gen X (ages 45 to 60, 27%), NielsenIQ reported. “Organic is not niche, it is mainstream,” said Sherry Frey, VP of Health & Wellness Thought Leadership for NIQ.
- On January 1, 21 states raised their minimum wage with more hikes expected later this year, Supermarket News reports. Of those, 15 states and the District of Columbia currently have a minimum wage of $15 or higher or are phasing in scheduled increases to $15 or more, including California, Massachusetts, New Jersey, New York, and Ohio. Washington State had the highest state minimum wage at $16.66 an hour as of Jan. 1. In addition, numerous city and county minimum wages increased on January 1 or later in 2025. While average wages for nonsupervisory employees at specialty food stores already exceed the new boosts to the minimum wage, when the minimum wage goes up, wages a little higher on the income ladder tend to rise as well. Except for the cost of goods sold, labor (wages, benefits, and payroll taxes) is typically the largest expense for grocery store operators.
- Employment by specialty food retailers inched up 0.8% in December compared to a year ago while average industry wages rose 5.3% over the same period to $18.93 per hour, easing from their peak in October, according to the latest US Bureau of Labor Statistics data. Average wages at specialty food stores have risen 17% over the past four years and are expected to rise even further due to minimum wage hikes by many states in January. Rising employee wages are a pain point for specialty food store operators trying to control costs and remain competitive in the face of rising grocery prices.
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