US Grocery Retailing Market Report 2022

Overview

• What you need to know
• This Report looks at the following areas
• Definition
• Market context
• COVID-19: US context
• Economic and other assumptions

Executive Summary

• Top takeaways
• Market overview
  • Figure 1: Total US sales and fan chart forecast of groceries, at current prices, 2016-26
  • Figure 2: Grocery retailing outlook, 2022-27
• Opportunities and challenges
• Rising costs and supply shortages challenge retailers and consumers
• In-store and omnichannel technology deliver the store of the future
• Automation solves operational challenges
• Call to action on climate change and sustainability
• Key consumer insights
• eCommerce remains elevated, but the store is still the preferred grocery channel
• Value concepts becoming increasingly important
• Shoppers frustrated by long checkouts and out of stocks

Market Size and Forecast

• Demand for groceries remains high prompting sales growth on top of already high levels
  • Figure 3: Total US sales and fan chart forecast of groceries, at current prices, 2016-26
• • Figure 4: Multi-outlet sales and forecast of groceries, at current prices, 2016-26

Segment Performance

• Supermarkets trail other channels; category leaders are Walmart and Amazon
• • Figure 5: Multi-outlet sales of groceries, by segment, at current prices, 2016-26
• Food and drink still the predominant grocery segment with room to grow in other areas
  • Figure 6: Multi-outlet sales of groceries, by category, at current prices, 2016-21
• • Figure 7: Supermarket sales of groceries, by category, at current prices, 2016-21

Market Factors

• Food prices surge as inflation accelerates to a 40-year high
  • Figure 8: 12-month percentage change, Consumer Price Index – All items versus food at home items, March 2021-February 2022
• Supply chain disruptions and out of stocks prompt consumer frustrations
• Labor shortages create challenges in the grocery sector
  • Figure 9: Unemployment and underemployment, 2007-22
• Restaurant rebound on the horizon
  • Figure 10: Sales of food at home and away from home, 2010-21
• Sustainability becomes increasingly important amid threat of climate change
• Continued impact of COVID-19 on consumer behavior

Competitive Strategies and Market Opportunities

• Winn-Dixie delivers value as prices rise
  • Figure 11: Winn-Dixie, “Down Down” program
• The opportunity: support shoppers during a time of uncertainty
• Grocers invest in tech to elevate and add convenience to the in-store experience
  • Figure 12: Hy-Vee’s reimagined store design; Nourish + Bloom autonomous shopping
• The opportunity: leverage in-store technology to deliver convenience to shoppers
• Sam’s Club rolls out automated inventory-checking robots
  • Figure 13: Grocery Dive features Sam’s Club robotic inventory analysis equipment
• The opportunity: leverage automated solutions to offset labor shortages and free up staff time to focus on customer service
• Kroger expands general merchandise categories through partnership with Bed Bath & Beyond
  • Figure 14: Kroger + Bed Bath & Beyond partnership
• The opportunity: carve out partnerships to expand across categories
• Grocers do their part to combat food waste
  • Figure 15: Grocers and grocery delivery companies do their part to combat food waste
• The opportunity: invest in AI or community partnerships to offset food waste
  • Figure 16: Kroger/Fred Meyer + Loop launch reusable packaging initiative

The Grocery Consumer: Fast Facts

Grocery Shopping Overview

• Who shops for groceries
• Nearly all adults shop for groceries, many share the responsibility
  • Figure 17: Grocery shopping responsibility, by gender and age, 2022
• How often they shop
• Shopping frequency is increasing as consumers shop in new ways and across multiple channels
• • Figure 18: Shopping frequency, by generation, 2022
• Parents are frequent grocery shoppers
  • Figure 19: Select shopping frequency, parental status by gender, 2022
• • Figure 20: Walmart appeals to parents with holiday baking kits
• Shopping method
• In-store rebounds, online and multichannel shopping remains elevated
  • Figure 21: Shopping methods, 2022
• • Figure 22: Select shopping methods, yearly comparison, 2019-22
• Millennials are driving multichannel shopping; older consumers stick to in-store
  • Figure 23: Shopping method, by generation, 2022
• Consumers shop in-store for impulse trips; online for stock up trips
  • Figure 24: Preferred shopping method by trip type, 2022
• • Figure 25: Preferred shopping method by trip type, by generation, 2022
  • Figure 26: Giant Foods eliminates pickup fees

Ongoing Impact of COVID-19

• Consumers continue pandemic behavior patterns
  • Figure 27: Impact of COVID-19 on grocery shopping, 2022
• Older consumers concerned about safety, younger consumers watch their spending
  • Figure 28: Impact of COVID-19 on grocery shopping, by generation, 2022
• • Figure 29: Albertson’s Just for U program, 2021
• Multicultural consumers embrace cooking at home
  • Figure 30: Selected impact of COVID-19 on grocery shopping, by race and Hispanic origin, 2022
• • Figure 31: H-E-B Virtual Cooking Classes: Hispanic Heritage month with Johnny Hernandez

Shopping by Category

• Consumers still shop in-store for most categories, but online shopping habits hold
  • Figure 32: Shopping for major categories – Online versus in-store, 2022
• Gen Zs and Millennials are shopping for more prepared foods
  • Figure 33: Shopping for major categories – Fresh prepared meals, by generation, 2022
• • Figure 34: Kroger partnership with ghost kitchen company Kitchen United

Retailers Shopped In-store

• Supermarkets and Walmart remain top preferred retail outlets for groceries
  • Figure 35: Retailers shopped in-store, 2022
• • Figure 36: Aldi’s “Charcuterie Board of Directors”
• Multicultural consumers diversify across different retailers
  • Figure 37: Retailers shopped in-store, by race and Hispanic origin, 2022
• • Figure 38: Kroger promotes Black-owned brands

Reasons for Preferred Grocery Retailer

• Proximity and value are primary drivers for consumers when choosing their retailer
• • Figure 39: Reasons for preferred physical grocery retailer, by generation, 2022
• Income level impacts grocery shopping approach; inflation will have an impact for all
  • Figure 40: Reasons for preferred physical grocery retailer, by household income, 2022
• • Figure 41: Euronews Next highlights Lifvs’ unmanned rural grocery stores

In-store Shopping Behaviors

• Grocery shoppers stick to their routines
  • Figure 42: In-store shopping behaviors, by generation, 2022
• • Figure 43: Walmart and NBC’s Today Show partnership, “Today Table”
  • Figure 44: Fresh Thyme Markets “smart” shelf tags create differentiation

Attitudes toward In-store Grocery Shopping

• The basic elements
• Freshness remains the top priority for in-store shoppers
  • Figure 45: Attitudes toward grocery shopping – Basic elements, by generation, 2022
• • Figure 46: Walmart announces partnership with vertical farming company Plenty
• Consumers enjoy grocery shopping; but grocery store burnout is increasing
• Product discovery and meal inspiration
• Quality perception of store brands
  • Figure 47: Attitudes toward grocery shopping – Product discovery and meal inspiration, by race and Hispanic origin, 2022
  • Figure 48: UNFI revamps private label brand Wild Harvest
• Grocers as inspiration for recipes and healthy eating
  • Figure 49: Giant Food in-store dietitian; Schnuk Markets’ “Good For You” program
• Growing interest in international cuisine
• Conscious consumers interested in sustainability and causes
• Combatting climate change and food waste
  • Figure 50: Attitudes toward grocery shopping – Environmental factors, by generation, 2022
• • Figure 51: Hellmann’s Mayonnaise tackles food waste
• Localism and activism
  • Figure 52: Attitudes toward grocery shopping – Localism and activism, by generation, 2022
• • Figure 53: Stop & Shop partners with About Fresh

Interest in In-store Experiences

• Freshness and product discovery remain at the top of the list
  • Figure 54: Albertsons partners with Picadeli to pilot AI-equipped salad bars
• • Figure 55: Interest in in-store experiences, by generation, 2022
• • Figure 56: Amazon Fresh highlights cashierless technology

Interest in Shopping App Features

• Shoppers interested in features that add value and convenience
  • Figure 57: Interest in shopping app features, by generation, 2022
• • Figure 58: Sam’s Club promotes Scan & Go checkout during Super Bowl

Consumer Frustrations with Grocery Shopping

• Long checkout lines and time spent frustrates consumers
• • Figure 59: Consumer frustrations with grocery shopping, by generation, 2022
• Out of stocks are a growing concern

Appendix – Data Sources and Abbreviations

• Data sources
• Sales data
• Forecast
• Consumer survey data
• Consumer qualitative research
• Abbreviations and terms
• Abbreviations
• Terms

Appendix – The Market

• Inflation-adjusted forecasts
  • Figure 60: Multi-outlet sales and forecast of groceries, at inflation-adjusted prices, 2016-26
  • Figure 61: Supermarket sales and forecast of groceries, at inflation-adjusted prices, 2016-26
  • Figure 62: Sales and forecast of groceries through other multi-outlet channels, at inflation-adjusted prices, 2016-26
• Retail channels by category sales
  • Figure 63: Supermarket sales of groceries, by category, at current prices, 2016-21
  • Figure 64: Sales of groceries through other multi-outlet channels, by category, at current prices, 2016-21
  • Figure 65: Multi-outlet sales of food and drink, by retail channel, at current prices, 2016-21
• • Figure 66: Multi-outlet sales of general merchandise, by retail channel, at current prices, 2016-21
  • Figure 67: Multi-outlet sales of HBC, by retail channel, at current prices, 2016-21