Grocery Stores & Supermarkets

Grocery Stores & Supermarkets

Brief Excerpt from Industry Overview Chapter:

Companies in this industry primarily retail a general line of food such as canned and frozen foods, fresh fruits and vegetables, as well as prepared meats, fish, and poultry. Major companies in the industry include Costco, Kroger, Target, and Walmart (all based in the US), as well as foreign companies such as Aeon (Japan); Aldi, Kaufland, and Lidl (all based in Germany); Carrefour (France); and Tesco (the UK).

COMPETITIVE LANDSCAPE

Consumer migration online has grocers racing to increase their online presence, while online players -- including Amazon and China's Alibaba -- are trying out brick-and-mortar retail. Fierce competition, particularly at the high and low ends of the market, and cost advantages enjoyed by online retailers have sparked supermarket price wars, which benefit consumers but threaten to erase the grocery industry's razor-thin profit margins. Grocery retailers' net profit after taxes declined from 1.5% in 2012 to just 1.0% in 2019, according to FMI.

PRODUCTS, OPERATIONS & TECHNOLOGY

Grocery stores and supermarkets stock a wide variety of food, beverages, and household items. Generally, stores sell a mix of fresh and frozen foods, packaged and canned goods, produce, meats, dairy products, nonfood items, and household goods. Selection may vary depending on format, retail strategy, and location. In the US, about 30% of products sold by grocery stores are food items, including meats (13% of overall sales); produce (11%); dairy products (11%); and frozen foods (7%). Nonfood items (6%) include health and beauty...