Retail Trends

ERS provides information on food store sales and sales growth, the share of food sales by retail segment, and industry structure.

Sales and Sales Growth

The Nation's 118,812 traditional food stores sold $648 billion of retail food and nonfood products in 2016. Grocery stores, including supermarkets and smaller grocery stores (except convenience stores) accounted for the largest share of food store sales (92.4 percent), followed by convenience stores without gasoline (4.2 percent). Specialized food stores, including meat and seafood markets, produce markets, retail bakeries, and candy and nut stores, accounted for the remaining 3.4 percent of the total.

Grocery store (excluding convenience stores) sales increased following the 2007-09 recession—a period of economic uncertainty in which traditional grocery retailers experienced negative inflation-adjusted growth. Since 2010, grocery store sales growth (in current dollars) exceeded the rate of inflation. Inflation-adjusted sales growth averaged 1.39 percent per year compared with -0.05 percent per year from 2000 to 2009. The slow and negative inflation-adjusted growth in annual sales at traditional grocery stores was likely due in part to increased competition from nontraditional food retailers—such as warehouse clubs, supercenters, drugstores, and other retailers—as more consumers economized on food spending.

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Industry Structure

Sales by the 20 largest food retailers totaled $515.3 billion in 2016, accounting for 66.6 percent of U.S. grocery store sales, up from 42.2 percent in 1996. Market shares held by the largest 4, 8, and 20 supermarket and supercenter retailers decreased slightly after the Great Recession. Since 2012, the longer-term trend of an increasing concentration of sales among the Nation's largest grocery retailers has resumed. This trend held true for the top 4 and top 8 grocery store chains, although the ratio for the top 20 fell slightly in 2016, declining 0.2 percent.

A contributing factor to these increases over the past decade has been the steady growth of Walmart supercenters. Their food and nonfood grocery sales amounted to an estimated $136.2 billion in 2016, making it the largest U.S. retailer of grocery products. In comparison, second-place Kroger—the largest traditional grocery retailer—had sales of $96.9 billion in 2016. Nevertheless, Kroger has been a major player in mergers-and-acquisitions activity, acquiring retailers such as Harris Teeter and Roundy's in the last few years. Meanwhile, aggregate grocery store sales rose 2.2 percent in 2016, a slightly smaller increase than the 2.3-percent rise recorded in 2015. This increase continued the trend of annual gains in grocery store sales after a recession-induced decline in 2009.

Supermarkets experienced major consolidation and structural change through mergers, acquisitions, divestitures, and internal growth in the mid-to-late 1990s. These factors produced increasing shares of the largest 4, 8, and 20 grocery retailers during this period. This vigorous consolidation activity slowed throughout the following decade but rose again during the last four years. Over 500 food industry mergers and acquisitions were recorded in 2016—the highest in 15 years—but below the record of 813 set in 1999. Some highlights for 2016 include the following: 

  • The top four grocery retailers in 2016 were Walmart Stores, Inc., Kroger, Albertson's, and Ahold Delhaize. Publix was ranked either fourth or fifth for most of the last decade, reflecting the impact of industry mergers and acquisitions—most recently, the merger of Ahold and Delhaize.
  • In 2016, the share of grocery sales by the top 4 and top 8 grocery retailers rose for the fourth consecutive year since 2012.
  • Much of the change in industry structure during the last few years resulted from consolidation, specifically two large mergers—the acquisition of Safeway by Albertson’s and the acquisition of Delhaize by Ahold.
  • Amazon acquired Whole Foods in the summer of 2017. The impact of this acquisition on industry market share will not be reflected in the reported concentration ratios until 2017. Because Amazon has yet to become a major player, the short-term effect on the overall structure of the retail food industry may be minimal. In contrast, the recent merger between Ahold and Delhaize—which were both large food retailers—was the primary reason for the larger market share for the four food retailers in 2016.