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
Dec 13, 2024 - Tariffs on Imports
- Import taxes are set to spike if President-elect Donald Trump makes good on his threat to impose a 25% tariff on goods from Mexico, resulting in higher prices for food and fresh fruit and vegetables in particular. According to the USDA, Mexico made up 69% of US vegetable imports and 51% percent of US fresh fruit imports in 2022, Specifically, data from the University of California, Davis finds that Mexico is the leading foreign supplier of tomatoes, avocados, raspberries, bell peppers, and strawberries to the US. If Trump follows through on his tariff threats, importers would bear those costs and likely pass them on to US consumers, resulting in higher prices and reduced selections in produce aisles. Moreover, Trump’s plan for mass deportations of undocumented workers – many of whom work in agriculture – would result in labor shortages and ultimately higher food prices, economists told The Atlantic.
- As concern over food price inflation eases, grocery shoppers are focusing on eating better to improve their health, according to a new report by Kroger that tracks consumer sentiment. Kroger’s Balancing Act: Wallet & Wellness report from its data and analytics group shows that consumers’ concern over inflation dropped to 56% in 2024 (down 17%) as grocery price increases eased from their peak in mid-2022. Meanwhile, shoppers are prioritizing healthy eating to better manage heart health, weight, and energy and cholesterol. Per the report, 61% of 18-24 year olds are working to eat better to improve their heart health, a statistic that increases with age. Shoppers between the ages of 25 and 74 cited heart health as important by between 68% and 85%. But price is still a factor for shoppers who responded to high prices by looking for sales, deals, and coupons at a rate of 67%, as of November.
- Among the key learnings from the November election is that Americans are exquisitely sensitive to rising prices, especially food prices. A new Statista spotlight report on Consumer Food Price Sensitivity in the US found 75% of adults in the US said price was important when buying food and beverages, with price impacting 82% of women compared to 70% of men making grocery purchase decisions. In 2023, the consumer price index of food was nearly double that of 2000. Over the last two years, the US has had one of the highest inflation rates for food products worldwide, with an inflation rate reaching as high as 9.9% in 2022, before easing to 5.8% in 2023. Food prices are still rising at above historical rates with the average price of a basic food basket totaling $210.15 in January 2024 compared to $156.50 five years ago.
- Producer prices for specialty food retailers fell 1.6% in September compared to a year ago after rising 10.1% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by specialty food stores also declined in September, down 4.8% year over year, while industry wages continued to rise, reaching a new high of $18.94 per hour over the same period, a 4.8% YoY increase, according to the BLS.
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