To Market, To Market: Trends in the MULO Grocery Store Industry
The multi-location grocery store industry is no longer just traditional grocers. Target, drug stores like CVS and Walgreens, and convenience stores now stock shelves with household staples. “Traditional” grocery stores have expanded their product offerings to include greeting cards, flowers, and hardware items. Specialty grocers abound, and many niche brands are expanding to new geographies and footprints.
The largest grocery retailer in the U.S. is now Walmart, with sales of close to $600B and a 26 percent market share.
Piggly Wiggly revolutionized the grocery shopping experience in 1916 when the company introduced the self-service concept. Before that, shoppers needed to hand their grocery lists over to someone who would fulfill the order. Of course, that concept still exists today, but in the form of digitally-driven shopping services like Instacart.
Although online shopping for groceries was popularized during the pandemic, most shoppers still like to wander the aisles in the real world (or speed through them on a purpose-driven mission).
The “grocery experience” is essential to consumers, as it is in many retail categories. According to a study by Accenture, convenience, inspiration, community, and responsibility/sustainability are all important to today’s consumers when choosing a grocery brand.
Stew Leonard was one of the pioneers of grocery shopping as an experience and was even dubbed “The Disneyland of Dairy Stores” because of its kid-friendly, cow-themed entertainment.
Today, Trader Joe’s has over 500 locations (more than Whole Foods) and a loyal following who love discovering new brands.
Digital experiences join food-related novelties, as Walmart recently tested snack robots in parking lots. They are like high-tech vending machines so shoppers can grab and go before or after their in-store experience.
The list of “preferred” grocery sellers (based on consumer value proposition) differs from the list of highest revenue generators. For example, H-E-B, Costco, and Amazon top the consumer appeal list, but the retailers with the greatest market share according to Retail Info Systems (rounded up), are:
- Walmart (17%)
- Amazon (14%)
- Costco (7%)
- Kroger (4%)
- Target (3%)
- Albertsons (2%)
- George Weston (Loblaw) (2%)
- Empire Company (.9%)
- BJs Wholesale Club (.5%)
- Spartan Nash (.3%)
Among the trends that will have an impact on the $850B industry include:
- Price competition, spurred on by inflation
- Private label products
- Personalized marketing and couponing, as grocers have more access to individual data
- Mergers and acquisitions
- Healthy and local options in-store
The days of handing your neighborhood grocer a list are long gone. The average grocery store now has about 30K SKUs!
We expect to see technology continue to shape the industry. We no longer ask the next-door neighbor for a stick of butter or a cup of sugar. We’re more likely to search for a product or ingredient “near me” and either check out ourselves or walk out of the store with a full basket, thanks to AI-powered autonomous (also known as frictionless) check-out.
As long as we need to eat, the grocery store (in all its forms) will be a staple of our lives, even when the basket is digital.
