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Grocery Stores & Supermarkets
First Research, March 2012, Pages: 10
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Executive Summary
Brief Excerpt from Industry Overview Chapter:
The US retail grocery industry includes about 65,000 supermarkets and other grocery stores with combined annual revenue of about $470 billion. Major companies include Kroger, Safeway, and SUPERVALU as well as Ahold, the US division of Netherlands-based Royal Ahold. The industry is concentrated: the 50 largest companies generate about 70 percent of revenue.
Global grocery and supermarket sales total more than $2.7 trillion annually. The leading 15 retailers account for more than 30 percent of worldwide sales.
COMPETITIVE LANDSCAPE
Population growth and consumer tastes drive demand. Because margins are low, the profitability of individual companies depends on high volume sales and efficient operations. Large companies can offer a wide selection of products and have advantages in purchasing, distribution, marketing, and finance. Small companies can compete effectively by offering specialty products, serving a local market, or providing superior customer service.
Discount stores and warehouse clubs have aggressively pursued the retail grocery market, and Wal-Mart is the largest seller of groceries in the US. Other competition includes specialty food stores, convenience stores, drugstores, dollar stores, and, to some degree, restaurants.
PRODUCTS, OPERATIONS & TECHNOLOGY
Nearly three-quarters of products sold are food items, including meats (14 percent); produce (10 percent); dairy products (8 percent); and frozen foods (5 percent). Nonfood items include health and beauty products, general merchandise, and medication (including prescription drugs).
The industry includes national and regional chains and independent retailers. Large companies may operate multiple chains under different banners. A typical grocery...
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