Supermarkets & Grocery Stores in the US

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Supermarkets & Grocery Stores in the US WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 1 Shop smart: Increasing premium brand sales and healthy eating trends will spur growth This report was provided to Illinois SBDC (2133312863) by IBISWorld on 28 June 2019 in accordance with their license agreement with IBISWorld IBISWorld Industry Report 44511 Supermarkets & Grocery Stores in the US April 2019 Darshan Kalyani 2 About this Industry 18 International Trade 31 Whole Foods Market Inc. 2 Industry Definition 19 Business Locations 31 Wakefern Food Corporation 2 Main Activities 32 Walmart Inc. 2 Similar Industries 21 Competitive Landscape 3 Additional Resources 21 Market Share Concentration 33 Operating Conditions 21 Key Success Factors 33 Capital Intensity 4 Industry at a Glance 22 Cost Structure Benchmarks 34 Technology and Systems 23 Basis of Competition 35 Revenue Volatility 5 Industry Performance 24 Barriers to Entry 35 Regulation and Policy 5 Executive Summary 25 Industry Globalization 36 Industry Assistance 5 Key External Drivers 7 Current Performance 26 Major Companies 37 Key Statistics 9 Industry Outlook 26 The Kroger Co. 37 Industry Data 12 Industry Life Cycle 27 Albertsons Companies LLC 37 Annual Change 28 Publix Super Markets Inc. 37 Key Ratios 14 Products and Markets 29 Ahold Delhaize 38 Industry Financial Ratios 14 Supply Chain 30 HEB Grocery Company LP 14 Products and Services 30 Meijer Inc. 39 Jargon & Glossary 16 Demand Determinants 30 ALDI US 17 Major Markets 31 Trader Joe’s www.ibisworld.com | 1-800-330-3772 | [email protected] WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 2 About this Industry Industry Definition The Supermarkets and Grocery Stores fresh and prepared meats, poultry and industry makes up the largest food retail seafood, canned and frozen foods, fresh channel in the United States. fruits and vegetables and various dairy Establishments in this industry retail products. Delicatessens primarily general lines of food products, including retailing food are also included. Main Activities The primary activities of this industry are Retailing a general line of food Retailing health and beauty products The major products and services in this industry are Beverages Dairy products Drugs and health products Fresh and frozen meat Frozen foods Fruit and vegetables Other foods Other nonfood items Similar Industries 44512 Convenience Stores in the US Establishments in this industry primarily retail a limited line of goods, known as convenience stores or food marts (except those with fuel pumps). 44611 Pharmacies & Drug Stores in the US Establishments in this industry retail a range of prescription and over-the-counter medications, health and beauty items, toiletries and consumable goods directly to consumers on a walk-in basis. 44711 Gas Stations with Convenience Stores in the US Establishments in this industry primarily retail automotive fuels in combination with a convenience store or food mart. 45291 Warehouse Clubs & Supercenters in the US Establishments in this industry wholesale general groceries (but not as their primary activity), as well as general lines of new merchandise. 45439 Direct Selling Companies in the US Establishments in this industry retail frozen food and freezer plans via direct sales to residential customers. Provided to: Illinois SBDC (2133312863) | 28 June 2019 WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 3 About this Industry Additional Resources For additional information on this industry www.fmi.org Food Marketing Institute www.nationalgrocers.org National Grocers Association www.supermarketnews.com Supermarket News www.nacsonline.com The Association for Convenience & Fuel Retailing www.worldbank.org The World Bank IBISWorld writes over 1000 US industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com Provided to: Illinois SBDC (2133312863) | 28 June 2019 WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 4 Industry at a Glance Supermarkets & Grocery Stores in 2019 Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24 Snapshot $654.6bn 0.9% 1.0% Profit Wages Businesses $10.5bn $66.5bn 42,470 Revenue vs. employment growth Per capita disposable income Market Share The Kroger Co. 4 4 16.4% 3 2 Albertsons 2 Companies LLC 0 1 9.7% % change % change -2 Publix Super 0 Markets Inc. -1 -4 5.7% Year 11 13 15 17 19 21 23 25 Year 12 14 16 18 20 22 24 Revenue Employment SOURCE: WWW.IBISWORLD.COM p. 26 Products and services segmentation (2019) 3.7% 5.5% Fruit and Key External Drivers Drugs and vegetables Per capita disposable health products income 6.4% Agricultural price index Frozen foods 35.0% Urban population 9.1% Other foods Healthy eating index Fresh and frozen meat 9.4% Other nonfood items p. 5 12.8% Dairy products 18.1% Beverages SOURCE: WWW.IBISWORLD.COM Industry Structure Life Cycle Stage Mature Regulation Level Medium Revenue Volatility Low Technology Change Medium Capital Intensity Low Barriers to Entry Medium Industry Assistance Low Industry Globalization Low Concentration Level Low Competition Level High FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 37 Provided to: Illinois SBDC (2133312863) | 28 June 2019 WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 5 Industry Performance Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage Executive Summary The Supermarkets and Grocery Stores toward limited assortment and fresh industry has grown over the five years to format stores like Aldi and Trader Joe’s 2019, benefiting from a strengthening that provide a simpler layout and economy. As per capita disposable primarily sell less costly store-brand income increased during the period, products. Due to increased competition many consumers shifted to premium, from a variety of retailers, many large organic and all-natural brands, helping national grocery chains offered big lift industry revenue. Conversely, discounts and promotions to drive foot inflationary food costs have caused many traffic to their stores and strengthen consumers to continue purchasing consumer loyalty. Large operators also private-label brands over the past five engaged in a variety of mergers and years. While a shift toward more generic acquisitions, as the saturated market goods curbs revenue growth, it helps prevented organic growth. Due to high operators maintain profit margins, as consolidation costs and intense price store brands are less costly to produce competition, industry profitability is expected to increase only slightly during the period. Large operators engaged in a variety of mergers Over the five years to 2024, the and acquisitions, as the saturated market industry is anticipated to grow steadily, resulting from rising prevented organic growth discretionary income and consumer preferences. As health concerns than national brands. Overall, industry intensify, more consumers will seek revenue is expected to grow an all-natural and organic products. annualized 0.9% to $654.6 billion over Operators are also anticipated to the five years to 2019, including a 1.0% benefit from steadier commodity increase in 2019 alone. markets that will cause input costs to Despite revenue growth during the rise much more conservatively than in period, industry operators experienced the past. Consequently, industry intensifying competition from alternative revenue is forecast to rise at an retailers. Consumers turned toward annualized rate of 1.0% to $687.6 warehouse clubs and supercenters, such billion over the five years to 2024. as Costco and Walmart, because of the Profit margins are expected to remain cost savings and convenience of these stable over the next five years as retailers. Mass merchandisers are able to increasing competition persists but offer lower prices due to their scale of private-label brands and more efficient operations. Consumers also shifted store layouts prevail. Key External Drivers Per capita disposable income representing a potential opportunity for Per capita disposable income determines the industry. an individual’s ability to purchase discretionary goods and services. When Agricultural price index disposable income declines, consumers The agricultural price index measures the limit purchases to essential items and prices received by farmers for all more affordable brands, curbing industry agricultural products, including livestock revenue growth. Per capita disposable and crops. As prices increase, industry income is expected to increase in 2019, operators often raise the price of their Provided to: Illinois SBDC (2133312863) | 28 June 2019 WWW.IBISWORLD.COM Supermarkets & Grocery Stores in the US April 2019 6 Industry Performance Key External Drivers merchandise sold to consumers, boosting increases, lifting industry revenue. In continued industry revenue. In 2019, the 2019, the urban population is anticipated agricultural price index is expected to to grow. rise. Volatility in the agricultural price index could pose a potential threat for Healthy eating index operators in the industry. As consumers become more health conscious, measured by the healthy Urban population eating index, they tend to purchase a Consumers living in urban populations greater variety of all-natural and tend to purchase groceries more organic products. Consequently, as frequently from industry establishments consumers demand a greater variety of instead of wholesale clubs and premium products, such as organic supercenters. Consequently,
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