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

Feb 13, 2024 - Price Increases Continued in 2023
  • Producer prices for specialty food stores increased by 6.5% in 2023 after surging 23.1% in 2022 amid rampant food and beverage price inflation. Overall, producer prices ended 2023 up an eye-popping 45% since the start of 2021. Employment by specialty food stores grew by 4.2% last year through November while average industry wages were relatively flat (up just $0.04) over the same period.
  • 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.
  • Lower grocery prices – good news for shoppers but not necessarily for retailers – may be coming soon, according to the CEO of grocery giant Walmart. The US food industry may be heading into a period of deflation following three years of steep price hikes that have caused sticker shock for shoppers, with food prices up by 25% since the pandemic started, Doug McMillon told CNN Business in November. While the pace of food inflation has slowed recently, prices are still going up, rising 3.3% annually in October from a year ago, according to the Bureau of Labor Statistics. But prices on some staples such as bacon, seafood, and eggs have dropped. “We may see dry grocery and consumables start to deflate in the coming weeks and months,” Doug McMillon said, noting his company, and presumably other grocery retailers, could enter a “deflationary environment.”
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