U.S. Food And Grocery Retail Market - Retailer Landscape

Report Overview

Consumers are increasingly prioritizing health and wellness, seeking organic, natural, and non-GMO products. There is a growing demand for plant-based foods, gluten-free, and other specialty diets (such as keto and paleo). Heightened awareness of nutrition, food allergies, and a desire for a healthier lifestyle is driving this shift. The demand for convenience has led to a rise in ready-to-eat meals, pre-packaged foods, and meal kits. Busy lifestyles, particularly in urban areas, are driving consumers to look for quick and easy meal solutions.

The integration of technology to enhance consumer experience is another significant trend observed in the food & grocery retail market. Self-checkout technology has transformed the shopping experience, offering consumers a new level of convenience and efficiency. With the growing prevalence of automated checkout systems in retail stores, shoppers can now independently scan and pay for their items without needing human assistance or cashiers. This technology is becoming increasingly common in grocery stores across the U.S., bringing numerous advantages to both retailers and customers.

For retailers, self-checkout lanes help reduce labor costs by decreasing the number of employees needed at traditional checkouts. This allows businesses to allocate resources more efficiently, redirecting staff to other areas like restocking shelves or customer service. As a result, overall operational efficiency is improved, and customer needs are met more promptly.

A significant benefit of self-checkout technology is its time-saving convenience for shoppers. As per the data published by Movista, 73% of consumers prefer self-checkout options due to shorter wait times and increased privacy. Self-checkout eliminates the need to wait for a cashier by allowing customers to scan and pay for their items themselves, streamlining the process and giving shoppers a greater sense of control over their experience. The automated systems and contactless payment options associated with self-checkout technology are revolutionizing the shopping process. They offer unmatched convenience, efficiency, and empowerment for consumers seeking a faster and more independent shopping experience. As this trend evolves, grocery retailers can anticipate further advancements in self-checkout technology that will continue to enhance the retail experience.

The e-commerce industry has undergone a major transformation with the rise of online grocery shopping, which has significantly impacted the U.S. food and grocery retail market. This digital shift has fundamentally changed consumer shopping habits by making grocery shopping more convenient and accessible.

The COVID-19 pandemic accelerated the growth of online grocery sales, with over 142 million Americans placing online grocery orders in 2021, as per the data published by Movista. This rapid digital transformation has enabled grocery retailers to expand their customer base and offer more personalized shopping experiences. Consumers can now browse a wide range of products and place orders from the comfort of their homes, saving time and reducing the need for physical store visits. This trend has led to a decrease in foot traffic in stores, while simultaneously increasing online sales.

Number Of Shoppers And Average Basket Size

As per the data published by the Rural Grocery Initiative, across the U.S., there were 63,945 supermarkets and grocery stores in 2023. Every day, these stores are frequented by diverse customers with various needs, preferences, budgets, and other buying characteristics. As consumer shopping habits change, it is essential to stay informed about where, when, and how much they shop for groceries. More than 1,000 consumers in the U.S. were surveyed to highlight supermarket shopping trends.

Fresh vegetables and dairy products provide vital nutrition, freshness, and convenience, making them staples in many diets. Snack meals are also popular because they satisfy appetites and give consumers a rapid energy boost. The most commonly purchased grocery products include dairy products, snack foods, fresh produce, bread and pastries, breakfast goods, and frozen goods. Snack foods like chips, cookies, crackers, and dried fruit were the second most popular grocery item (85%) for homes with five or more members, after fresh produce (88%). However, fresh produce and dairy products were more frequently mentioned as the things that are purchased by households with one to four members.

Budget-Friendly Retail Stores

Modern consumers are increasingly informed and discerning. With access to information through digital platforms, shoppers are now more aware of pricing strategies and promotions offered by various retailers. This has led to an uptick in price comparison shopping, where consumers actively seek the best deals available. Retailers that offer budget-friendly options-such as private label products or discounted brands-are gaining traction as they meet this demand for affordability without compromising quality. According to an article by Datasembly Inc., in 2023, 66% of consumers looked for more affordable products, which marked an increase of four percentage points compared to 2022.

Market force Information, a company specializing in consumer experience, conducted a survey involving 6,555 consumers regarding their grocery shopping behaviors from November 2022 to January 2023 as part of its 2023 U.S. Grocery Benchmark Study. The results shows affordable grocery stores in the U.S. as per the participants preferences.

Growth Of Discount Grocery Stores

The expansion of discount grocery stores is a key trend reshaping the U.S. food and grocery retail market. Chains such as Aldi and Lidl are gaining traction by capitalizing on their efficient business models, which include streamlined supply chains and limited product ranges. These stores often use a no-frills approach, reducing operational costs and passing the savings onto consumers through lower prices. Their growth is further fueled by strategic site locations in both urban and suburban areas, making them more accessible to a broader customer base. This model has proven effective in appealing to consumers who are increasingly seeking ways to manage their grocery budgets more effectively.

Large discount stores in the U.S. include Family Dollar, Dollar General, Dollar Tree, Big Lots, Five Below, Costco, Sam’s Club, and Ollie’s Bargain Outlet. Dollar Tree, Inc. is one of the largest American multi-price-point chains of discount variety stores. According to an article by ScrapeHero, as of August 2024, there were a total of 7,775 Family Dollar stores operating in the U.S. Texas held the record for the highest number of Family Dollar locations, with 1,119 stores, which accounted for approximately 14% of all Family Dollar outlets nationwide. 

Competitive Landscape

Popularity of food & grocery retail stores among millennials:

Popularity of food & grocery retail stores among Gen-X:

Popularity of food & grocery retail stores among baby boomers: