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US Grocery Retailing market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Grocery Retailing market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This Report focuses on all retail channels that provide grocery products including:

  • Traditional supermarkets
  • Warehouse clubs
  • Natural markets
  • Drug stores
  • Dollar stores
  • Convenience stores
  • Internet retailers (eg, Peapod, FreshDirect)
  • Farmers markets

Groceries are defined as products such as:

  • Food
  • Beverages
  • Cleaning products
  • Household goods (eg, cleaning products, toilet paper, garbage bags)
  • Personal care products

This report builds on the analysis presented in Mintel’s Grocery Retailing – US, November 2016 and 2015.

Expert analysis from a specialist in the field

Written by Diana Smith, a leading analyst in the Retail sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Given the essential nature of groceries, the industry remains somewhat protected from outside influencers that can cause wide variances in sales. However, food deflation has put a damper on sales and squeezed profits the past two years, causing some price wars. Channel switching is frequent in the industry, as consumers shop around for the lowest prices and/or look to fulfill all their needs. Common areas of strategic focus include improvements to produce and other fresh products, an increased emphasis on private label brands, investments in e-commerce and how to evolve into a lifestyle brand rather than merely a place to conduct transactions. Diana Smith
Associate Director - Retail & Apparel

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Sales inch slightly up as food costs rise
              • Figure 1: US multi-outlet sales and fan chart forecast of groceries, at current prices, 2013-23
            • Strong preference for in-store shopping
              • Figure 2: Shopping methods, by generation, April 2018
            • “Slow leak” at traditional supermarkets
              • Figure 3: Purchase incidence by channel – Shopping more, April 2018
            • Loyal to location and low prices
              • Figure 4: Shopping preferences, April 2018
            • The opportunities
              • Make natural and organic foods more accessible
                • Figure 5: Purchase incidence at natural/organic grocers, April 2018
              • Constantly refine what convenience means
                • Figure 6: Desired improvements, April 2018
              • Lean into experiential retailing
                • Figure 7: Attitudes toward store experiences, by gender and age, April 2018
              • What it means
              • The Market – What You Need to Know

                • Sales back on track as food prices rise
                  • Traditional grocers need to capture more non-food sales
                    • Share of food away from home inches up
                      • Millennials assume more grocery responsibility
                        • Increased attention on health means heightened awareness of manufacturers’ claims, ingredients, and processes
                        • Market Size and Forecast

                          • Steady growth on the horizon
                            • Figure 8: US multi-outlet sales and fan chart forecast of groceries, at current prices, 2013-23
                            • Figure 9: Multi-outlet sales and forecast of groceries, at current prices, 2013-23
                        • Market Breakdown

                          • Breakdown by channel
                            • Sales relatively split between supermarkets and “all others”
                              • Figure 10: Multi-outlet sales and forecast of groceries, by channel, at current prices, 2013-23
                              • Figure 11: Percentage of total multi-outlet sales of groceries, by channel, at current prices, 2013-23
                            • Breakdown by product category
                              • Food and drink remain dominant type of “groceries” purchased
                                • Figure 12: Multi-outlet sales of groceries, by category, at current prices, 2013-18
                              • Breakdown by product category and channel
                                • Supermarkets’ non-food share is minimal and shrinking
                                  • Figure 13: Percentage of MULO sales of food and drink versus non food and drink, by channel, at current prices, 2018
                                  • Figure 14: Total MULO percentage of sales of groceries, by channel, by category, at current prices, 2018
                              • Market Perspective

                                • Share of food away from home inches up
                                  • Figure 15: Share of food expenditures for food at home and food away from home, 2008-18
                              • Market Factors

                                • Millennials most likely to assume sole grocery shopping responsibility
                                  • Figure 16: Grocery shopping responsibility, by generation, April 2018
                                • Increasing diversity influences food and drink preferences
                                  • Figure 17: Purchase incidence by channel, by race and Hispanic origin, April 2018
                                • Americans are trying to eat healthier
                                  • Food prices creep back up
                                    • Figure 18: Changes in at-home food price indexes, 2016-18
                                • Key Players – What You Need to Know

                                  • When it comes to grocery, Walmart is untouchable
                                    • Meal kit expansion could drive sector growth
                                      • It’s all about Prime at Amazon and now, Whole Foods
                                        • Lidl slows down US expansion plans
                                          • More consolidation on the horizon?
                                            • Grocers getting more tech savvy
                                            • Company Sales of Grocery Retailers

                                              • Welcome Amazon to the Top 20
                                                  • Figure 19: Top US grocery retailers, 2018
                                              • What’s Trending?

                                                • Meal kit suppliers seek brick and mortar partners
                                                  • In their words: meal kits
                                                    • Amazon and Whole Foods: A year later
                                                      • Figure 20: Whole Foods E-mail, February 2018
                                                      • Figure 21: Amazon E-mail, February 2018
                                                    • In their words: the Amazon and Whole Foods effect
                                                      • Grocery stores sought out to anchor shopping centers
                                                        • Foodservice in grocery retail gets bigger
                                                        • What’s Struggling?

                                                          • Lidl’s US debut off to a slow start
                                                            • Price wars in recent years may have led to some bankruptcies and sales declines
                                                            • What’s Next?

                                                              • Landscape ripe for more mergers and acquisitions
                                                                • Tech becoming more of a priority
                                                                  • Figure 22: The Kroger Co., Scan, Bag, Go E-mail, June 2018
                                                                  • Figure 23: Attitudes toward voice command technology, by key demographics, April 2018
                                                                • Brick and mortar retailers test new store formats
                                                                  • In their words: the future of grocery
                                                                  • The Consumer – What You Need to Know

                                                                    • Most shoppers are making weekly trips
                                                                      • Online shopping still lags behind
                                                                        • Value-oriented stores outperforming others
                                                                          • Loyal to location and price
                                                                            • Experiential retailing efforts may be paying off
                                                                            • Grocery Shopper Demographic Profile

                                                                              • For the most part, grocery shopping is a one-person job
                                                                                • Figure 24: Grocery shopping responsibility, April 2018
                                                                                • Figure 25: Grocery shopping responsibility, by key demographics, April 2018
                                                                              • Traditional gender roles continue to change
                                                                                • Figure 26: Percentage of men who share the grocery shopping responsibility, August 2016-April 2018
                                                                            • Grocery Shopper Segmentation

                                                                              • Using data to dimensionalize shoppers’ needs and motivations enables more finite targeting
                                                                                  • Figure 27: Grocery shopper segments, April 2018
                                                                                • Engaged Experimenters (39%)
                                                                                  • Characteristics
                                                                                    • Opportunities and Risks
                                                                                      • Figure 28: Demographic profile of Engaged Experimenters, April 2018
                                                                                    • Routine Shoppers (32%)
                                                                                      • Characteristics
                                                                                        • Opportunities and Risks
                                                                                          • Figure 29: Demographic profile of Routine Shoppers, April 2018
                                                                                        • On Demand Pragmatists (29%)
                                                                                          • Characteristics
                                                                                            • Opportunities and Risks
                                                                                              • Figure 30: Demographic profile of On Demand Pragmatists, April 2018
                                                                                          • Spending and Shopping Frequency

                                                                                            • Average weekly spending hovers above $100
                                                                                              • Figure 31: Average grocery expenditures per week, January 2017-March 2018
                                                                                              • Figure 32: Average grocery expenditures per week, by household income, January 2017-March 2018
                                                                                            • 80% shop at least weekly
                                                                                              • Figure 33: Frequency of shopping, April 2018
                                                                                              • Figure 34: Average number of times shopped in past four weeks, by top 10 shopped supermarkets/food stores, January 2017-March 2018
                                                                                            • Quick fill-in trips on the rise
                                                                                              • Figure 35: Heavy shopping* frequency, by fill-in versus stock-up preferences, by key demographics, April 2018
                                                                                          • Shopping Method

                                                                                            • Nearly all shopping done in-store, but online continues to grow
                                                                                              • Figure 36: Shopping methods, April 2018
                                                                                            • Retailers should focus on multi-channel shoppers
                                                                                              • Figure 37: Shopping methods, by nets, April 2018
                                                                                              • Figure 38: Single versus multi-channel shoppers, by generation, April 2018
                                                                                            • High consumer interest in shopping online in the future
                                                                                            • Purchase Incidence by Channel

                                                                                              • Online-only retailers, farmers’ markets, and natural/organic stores see slightly more shoppers
                                                                                                • Figure 39: Purchase incidence by channel – Any shopping, April 2018
                                                                                              • Shopping patterns remain rather status quo with value-oriented stores on top
                                                                                                • Figure 40: Purchase incidence by channel, April 2018
                                                                                              • Thoughts on discount grocers
                                                                                                • Thoughts on dollar stores
                                                                                                  • Thoughts on organic/natural grocers
                                                                                                  • Channels Shopped by Item

                                                                                                    • Consumers continue to compartmentalize their shopping needs
                                                                                                        • Figure 41: Channels shopped by item, April 2018
                                                                                                    • Shopping Process

                                                                                                      • How consumers feel about the process
                                                                                                        • Grocery shopping is enjoyable to most
                                                                                                          • Figure 42: Grocery shopping enjoyment, April 2018
                                                                                                          • Figure 43: Grocery shopping enjoyment, by gender and age, April 2018
                                                                                                        • In their words
                                                                                                          • What consumers do before or while shopping
                                                                                                            • Path to purchase is longer for multi-channel shoppers
                                                                                                                • Figure 44: Shopping process, April 2018
                                                                                                                • Figure 45: Shopping process among in-store shoppers, by age, by gender, April 2018
                                                                                                              • The role of coupons
                                                                                                                • Paper coupons still have their place in a digital world
                                                                                                                  • Figure 46: Sources of coupons, ever used, January 2017-March 2018
                                                                                                                • How consumers learn about new products
                                                                                                                  • Social media should be on the radar
                                                                                                                    • Figure 47: Channels for online food/drink discovery, February 2018
                                                                                                                  • How consumers shop once in the store
                                                                                                                    • Fill-in and stock-up food and beverage shoppers both visit most aisles
                                                                                                                      • Figure 48: Food/drink section shopped, by quick fill-in versus stock-up preferences, April 2018
                                                                                                                  • Influencers

                                                                                                                    • Purchasing decisions extend well beyond the primary purchaser
                                                                                                                      • Figure 49: Influence of others, April 2018
                                                                                                                      • Figure 50: Influence of others, by grocery shopping responsibility, April 2018
                                                                                                                      • Figure 51: Influence of others, by number of children of any age in household, April 2018
                                                                                                                    • Websites, social media, and recommendations influence product discovery
                                                                                                                      • Figure 52: Method of learning about the last new food and drink bought online, February 2018
                                                                                                                    • Packaging and label communication also influence product choices
                                                                                                                      • Figure 53: Label communication, April 2018
                                                                                                                  • Loyalty in Grocery

                                                                                                                    • On average, shoppers visit at least two stores, which means less loyalty to any given store
                                                                                                                      • Figure 54: Number of stores shopped, April 2018
                                                                                                                    • In their words: why they shop at multiple stores
                                                                                                                      • Loyalty to location
                                                                                                                        • Figure 55: Loyalty to store location, by key demographics, April 2018
                                                                                                                      • In their words: grocery store loyalty
                                                                                                                        • Loyalty to savings
                                                                                                                          • Figure 56: Loyalty to price versus brands, by key demographics, April 2018
                                                                                                                        • In their words: brand loyalty
                                                                                                                          • How can brands get past the price barrier?
                                                                                                                          • Attitudes toward Private Label

                                                                                                                            • Six in 10 shoppers think store brand quality equates to national brands
                                                                                                                              • Figure 57: Attitudes toward store brands versus name brands, by select demographics, April 2018
                                                                                                                            • Room to grow private label online
                                                                                                                              • Figure 58: Where store brands are purchased, by age, April 2018
                                                                                                                            • In their words
                                                                                                                            • Improving the Shopping Experience

                                                                                                                              • Experiential retailing is paying off
                                                                                                                                • Figure 59: Attitudes toward store experiences, by generation, April 2018
                                                                                                                              • In their words: thoughts on in-store experiences
                                                                                                                                • Foodservice plays a key role in creating experiences
                                                                                                                                  • Figure 60: Attitudes toward stores as destinations, by gender and age, April 2018
                                                                                                                                • In their words: thoughts on in-store foodservice
                                                                                                                                  • Customized offers, samples, and fast checkout are top desired improvements
                                                                                                                                    • Figure 61: Desired improvements, April 2018
                                                                                                                                    • Figure 62: TURF analysis – Desired improvements, April 2018
                                                                                                                                  • In their words: the “one” thing grocers could do better
                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                    • Data sources
                                                                                                                                      • Sales data
                                                                                                                                        • Fan chart forecast
                                                                                                                                          • Consumer survey data
                                                                                                                                            • TURF methodology
                                                                                                                                              • Consumer qualitative research
                                                                                                                                                • Direct marketing creative
                                                                                                                                                  • Abbreviations and terms
                                                                                                                                                    • Abbreviations
                                                                                                                                                      • Terms
                                                                                                                                                      • Appendix – The Market

                                                                                                                                                          • Figure 63: Multi-outlet sales and forecast of groceries, at inflation-adjusted prices, 2013-23
                                                                                                                                                          • Figure 64: Supermarket sales and forecast of groceries, at inflation-adjusted prices, 2013-23
                                                                                                                                                          • Figure 65: Sales and forecast of groceries through other multi-outlet channels, at inflation-adjusted prices, 2013-23
                                                                                                                                                          • Figure 66: Multi-outlet sales of groceries, by channel, at current prices, 2016 and 2018
                                                                                                                                                          • Figure 67: Supermarket sales of groceries, by category, at current prices, 2013-18
                                                                                                                                                          • Figure 68: Sales of groceries through other multi-outlet channels, by category, at current prices, 2013-18
                                                                                                                                                          • Figure 69: Multi-outlet sales of food and drink, by retail channel, at current prices, 2013-18
                                                                                                                                                          • Figure 70: Multi-outlet sales of general merchandise, by retail channel, at current prices, 2013-18
                                                                                                                                                          • Figure 71: Multi-outlet sales of HBC, by retail channel, at current prices, 2013-18
                                                                                                                                                          • Figure 72: Population by race and Hispanic origin, 2013-23
                                                                                                                                                          • Figure 73: Generations, by race and Hispanic origin, 2018
                                                                                                                                                      • Appendix – Key Players

                                                                                                                                                          • Figure 74: Top US grocery retailers, brands/concepts included, 2018
                                                                                                                                                      • Appendix – The Consumer

                                                                                                                                                          • Figure 75: Supermarkets/food stores shopped in the past four weeks, January 2017-March 2018
                                                                                                                                                          • Figure 76: Number of times shopped at any supermarket/food store in past four weeks, January 2017-March 2018
                                                                                                                                                          • Figure 77: Coupon usage, January 2013-March 2018
                                                                                                                                                          • Figure 78: Types of coupons used, January 2017-March 2018
                                                                                                                                                          • Figure 79: Where coupons are redeemed, January 2017-March 2018
                                                                                                                                                          • Figure 80: Table – TURF analysis – Desired improvements, April 2018