U.S. Supermarket and grocery store industry
This article aims to examine the U.S. supermarket and grocery store industry in detail. Supermarkets and groceries sell a variety of products including but not limited to fruit, vegetables (both fresh and frozen), drinks, bakery items, canned goods, candy and snacks, meat, fish, cleaning products, toiletries, household essentials, health and beauty products, pet food and accessories, baby care and feeding accessories, and toys. Some supermarkets go beyond and sell clothes, home furniture and appliances, movies, books, electronics, and many more!
Overview and the market size of the U.S. supermarket and grocery store industry
How much is the U.S. supermarket and grocery industry worth? The answer is $682 billion according to IBISWorld (2020). However, the growth in 2020 is expected slow due to economic slowdown and associated challenges. The average household spending on groceries varies from cities to cities e.g. $314 a month in Atlanta to $516 a month in Seattle (Knueven, 2020). However, it is worth noting that the final figure is much higher when total food spend is put together. The U.S. has the largest grocery market in the world; however, China is likely to overtake it by 2023 in value terms (IGD, 2019).
An average American consumer spends around $89 per shopping trip and makes about 1.6 trips to supermarkets and grocery stores on average per week. Though consumer behaviour is changing fast with many relying on online shopping, the vast majority of consumers still prefer to shop in stores (Conway, 2019). To remain ahead of competition and identify what really matters to consumers, supermarkets spend millions of dollars on market research and development every year.
Generally, price is the Number 1 factor in how and what an average American consumer buys; however, other factors e.g. convenience, quality, sales promotion, and store organisation also play a big role. It is relevant here to mention that technology, particularly smartphone, has also helped consumers look for that they want more efficiently and conveniently and impacted on their decision-making.
Competition in the U.S. supermarket and grocery store industry
O’Connell (2020) states that the terms supermarkets and grocery stores are often used interchangeably to refer to retail food stores. A typical supermarket must offer a full line of groceries, meat, and produce with at least $2 million or more in sales per year. Competition in this industry is abosolutely fierce with a number of giants vying for every single cent to increase their market share.
Though there are many independent stores of different sizes all over the USA, the majority of supermarkets are part of big chains. The key competitors in this industry are Kroger, Albertsons, Ahold Delhaize, Publix Super Markets, Aldi, H-E-B Grocery, Walmart, Wakefern, and Whole Foods Market (Amazon). Conway (2019) reports that Kroger was the largest supermarket in the USA in 2018 in terms of retail sales. It made sales worth of $110.6 billion in that year which was almost double the figure made by the nearest competitor, Albertsons.
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Last update: 19 June 2020
Conway, J., (2019) U.S. Food Retail Industry – Statistics & Facts, available at: https://www.statista.com/topics/1660/food-retail/ (accessed 18 June 2020)
IBISWorld (2020) Supermarkets & Grocery Stores Industry in the US – Market Research Report, available at: https://www.ibisworld.com/united-states/market-research-reports/supermarkets-grocery-stores-industry/ (accessed 18 June 2020)
IGD (2019) IGD: China to become world’s largest grocery market by 2023, available at: https://www.igd.com/articles/article-viewer/t/igd-china-to-become-worlds-largest-grocery-market-by-2023/i/21818#:~:text=China%20will%20overtake%20the%20US,market%20size%20will%20reach%20CNY11. (accessed 10 June 2016)
Knueven, L., (2020) What average Americans spend on groceries every month in 22 major cities, available at: https://www.businessinsider.com/personal-finance/what-americans-spend-on-groceries-every-month-2019-4?r=US&IR=T (accessed 15 June 2020)
O’Connell, L., (2020) Number of supermarket stores in the United States from 2011 to 2018, by format, available at: https://www.statista.com/statistics/240892/number-of-us-supermarket-stores-by-format/#:~:text=The%20total%20number%20of%20U.S.%20supermarket%20stores%20amounted%20to%2038%2C307%20that%20year.&text=The%20terms%20supermarkets%20and%20grocery,refer%20to%20retail%20food%20stores. (accessed 18 June 2020)
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Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.