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 18,150 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.

Perishable Products

Specialty food stores typically carry more perishable products than traditional food retailers, often comprising two-thirds or more of their product offerings.

Dependance On Economic Conditions

Specialty food customers typically are more affluent (household income of $75,000) than the average grocery store shopper.

Industry size & Structure
Industry Forecast
Specialty Food Stores Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Mar 13, 2024 - Producer Price Increases Eased in 2023
  • Producer prices for specialty food stores rose 6.8% in December compared to a year ago after surging 25% in the previous annual comparison amid rampant food and beverage price inflation, according to the US Bureau of Labor Statistics. Employment by specialty food stores fell 4.2% over the same period while average wages rose to $18.02 per hour in December, a 2.5% year-over-year change, according to the BLS.
  • The Shrinkflation Prevention Act, introduced in the Senate in February, aims to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering prices, according to the bill’s authors democratic senators Elizabeth Warren and Bob Casey. The proposed bill would direct the Federal Trade Commission (FTC) to develop regulations that classify shrinkflation as an unfair or deceptive practice and would prohibit manufacturers from engaging in shrinkflation. Additionally, it would authorize the FTC to pursue civil actions against corporations engaging in shrinkflation and authorize state attorneys general to bring civil actions against corporations engaging in the practice. Snacks such as chips and cookies have become 26% more expensive since January 2019, according to a recent report released by Casey. Nearly 10% of the price increase was due to shrinkflation, per the report. Critics say the bill would go too far by telling companies how to package their products.
  • Grocery chains are coming under increasing pressure from the Biden administration to lower their prices, The New York Times reports citing an analysis by the White House Council of Economic Advisers. The analysis of Census data shows that grocers have maintained the higher profit margins they began generating following the onset of the pandemic while at the same time, other types of retailers have reported lower margins. It indicates that the food and beverage sector is generating profit margins that are approximately 2% above where they were in early 2020, bringing them to a 20-year high, according to NYT. “There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” the president remarked in late January. After hitting a 40-year high of 13.5% in September 2022, grocery inflation has steadily eased to a 1.3% annual rate in December 2023.
  • Specialty food retailers may be poised for growth in 2024, according to new research from shopper traffic analytics firm Placer.ai. The report showed strong year-over-year traffic increases at higher-end specialty supermarkets in major markets over the holidays, even as shoppers also flocked to more price-driven banners, the Specialty Food Association reports citing Placer.ai data. As more consumers strive to create restaurant-quality dishes at home they’re visiting specialty food stores to buy ingredients. In November, monthly visits were up 20.9% at Lazy Acres in California versus a year ago; monthly visits rose 10.6% at New York’s Uncle Giuseppe’s and were up 8.3% at Cermak Fresh Market in Illinois. All three chains also saw similar increases in September and October. “Rising interest in sustainability, natural products, and organic ingredients – especially among Gen Z – likely helped drive traffic growth as well,” per Placer.ai.
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