Are independent grocers thriving?
Independent grocery has grown to account for a third of total U.S. grocery sales, up from 25 percent a decade ago, according to a new study from the National Grocers Association (NGA).
Sales by the independent supermarket sector was almost 94 percent higher in 2020 as compared to 2012, the year of NGA’s last economic impact study. During that same period, total U.S. grocery store sales climbed 47 percent, according to NielsenIQ/TDLink data cited in NGA’s research, conducted by John Dunham & Associates.
“The continued strength and growth of the independent supermarket industry shows consumers are supporting local, community grocers who continue to innovate and bring value to the communities they serve,” Greg Ferrara, NGA president and CEO, said in a statement.
E-commerce investments, including the ability to accept SNAP and EBT payments purchases online, were cited as part of the reason for success in recent years.
The study did find independent grocers lost ground in many rural and urban areas where food deserts exist. NGA attributed that, in large part, to competitive advantages in the marketplace that favor big box retailers and dollar stores.
The independents were defined as privately-owned grocery stores offering a wide selection of four staple grocery categories with annual sales ranging from $2 million to $5 billion.
The findings would appear to represent a resurgence for independent grocers.
An industry analysis by researchers at the University of Rochester estimated that between 1992 and 2013 America’s top twenty grocery stores increased their market share from 39 percent to 64 percent.
A USDA study from 2017 found that independent grocers — defined as operators with four stores or fewer — saw their market share decline in 44 percent of U.S. counties between 2005 and 2015 as chain stores increased their dominance during the Great Recession. Independents were found to remain crucial for food access in some communities. The USDA stated, “Independent stores play a vital role in rural communities, particularly those not adjacent to urban counties, or remote rural counties.”
An analysis from S&P Global that came out last May predicted independent grocers risked ceding share to larger players that are better equipped to handle pandemic-driven increased demand and supply-chain disruption.
- New Study Highlights Independent Community Grocers’ Pivotal Role in Growing the U.S. Economy – National Grocers Association
- Grocers Impact America – National Grocers Association
- The Evolution of the Supermarket Industry: From A&P to Walmart – University of Rochester
- Independent Grocery Stores in the Changing Landscape of the U.S. Food Retail Industry – USDA
- Independent grocers could lose share to Kroger, Amazon amid coronavirus crisis – S&P Global
DISCUSSION QUESTIONS: Does it make sense that market share losses for grocery independents have stabilized in recent years and are showing some recovery? Have the points of differentiation for independent grocers notably changed over the last few decades?