We analyzed the 86,955  tax returns that were filed in the grocery store industry to pull out some key statistics and insights to help our customers ensure that they are creating realistic financial projections for their grocery store. This article is a part of the Retail practice’s new annual report on the grocery industry, which summarizes major trends insights that are new and relevant for the grocery market, giving the reader a content edge and best practice guides. It is produced in collaboration with EuroCommerce, an organization representing the retail sector in the EU.

Indeed, two out of three CEOs believe growth will be slower this year than in 2022. Similarly, in our conversations, CEOs described the industry as “volatile,” “challenging,” “uncertain,” and “competitive”—sentiments that indicate the difficult road ahead. Sample
spreadsheet that includes breakdowns by total asset size can be viewed free online. Based on the tax returns of roughly 87,000 sole proprietors operating in the grocery store industry, the following were the 10 largest business expenses as a percentage of revenue. The average annual expenses for all sole proprietorship grocery store businesses in the U.S. was $281,159. Financial ratios are an important tool that managers and investors use to evaluate company performance.

Grocery Store Industry Financial Statistics: Sales, Expenses, Profit and More

The food cupboard segment held the largest market share of more than 37.5% in 2021. Consumers cooked food from the scratch due to the pandemic-induced lockdowns, which resulted in the temporary closure of bars, restaurants, and cafes. The surge in cooking and baking activities, predominantly noticed among Generation Z consumers has led to an increased demand for the food cupboard segment in recent years. However, the beverages segment is projected to register the fastest growth during the forecast period. The off-trade purchases of beer, wine, and non-alcoholic beverages shot up due to the closure of restaurants, bars, pubs, and cafes during the pandemic.

• The average annual revenue for all sole proprietorship grocery store businesses in the U.S. was just $289,628.
• These ratios are calculated for publicly traded U.S. companies that submit financial statements to the SEC.
• Last year, our analysis highlighted how grocery retailers were building ecosystems by partnering with tech companies, joining forces with delivery companies, and creating new value propositions.
• That trend reversed in 2020, with shoppers indicating their overall trip frequency was only half of prepandemic levels through spring and summer of 2020.
• We now see grocery retailers moving beyond the core by entering new categories, developing new sourcing strategies, expanding into consumer services, and selling B2B services that harness their strengths.

According to Oracle’s Grocery Retail survey, carried out in 2020, 71% of customers exhibited speedy checkout as a top priority, followed by informed staff (57%). Asia Pacific accounted for the maximum share of 36.3% of the global revenue in 2021. The proliferation of supermarkets in developing countries in this region is the main factor leading to the dominance of this region. Increases in mobile usage and broadband penetration, particularly in developing countries, have also aided in the growth of online food purchases. A brand or retailer’s sustainability commitments continue to influence purchasing decisions, particularly among younger consumers (Exhibit 7). Shoppers increasingly expect companies to “walk the walk.” In fact, we see a clear link between consumer spending and a company’s ESG efforts.18“Consumers care about sustainability—and back it up with their wallets,” McKinsey, February 6, 2023.

The grocery sector demonstrated an incredible amount of resiliency in 2020 and is poised to continue to serve the most urgent consumer needs, albeit against a drastically different set of imperatives from two years ago. As the world began to see the pandemic as a crisis measured in months, not days, behavior shifts continued to shape an evolving sector. This FREE sample includes market data points, ranging from trend analyses to market estimates online invoicing portal & forecasts. Grocery executives who can develop effective strategies across these five trends will position their organizations to not only restart growth but also weather an unpredictable landscape. Grocers are redefining their business models to capitalize on fulfillment opportunities and adapting their value propositions. They could extend their reach by embracing third-party marketplaces, dark stores, and microfulfillment centers.

U.S. food retail industry – statistics & facts

We partnered with STORY Pitch Decks to analyze the financial projections of 107 of our clients to get a clear idea of what tech startups are projecting in terms of revenue and profitability. StarterStory has an incredible database of over 2,600 startup case studies which include many in the D2C Product space, so we pulled together and analyzed a group of 99 D2C startups to learn more about what these companies actually generate in terms of revenue. Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning.

Other factors, including the continued consolidation of the grocery market through M&A and persistent inflation, will further push grocers to offer competitive low-price options. There is an emerging trend wherein individuals are resorting to cooking international cuisines at home, to recreate the experience of traveling and vacationing. Food cupboard staples like curry pastes and spice mixes offer amateur home cooks a shortcut to flavor-filled meals. Hence, food cupboard products have become an important and lucrative sector for specialty shops to pursue, as the home cooking trend grows and along with it the demand for ingredients that will add something unique to a normal dish. For instance, in China, Alibaba’s 232 Freshippo (Hema) stores were built with delivery as a top emphasis.

Stores

The global food & grocery retail market size was valued at USD 11,324.4 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 3.0% from 2022 to 2030. The growth can be primarily attributed to COVID-19 lockdown-induced higher spending on groceries, increased online-grocery sales volume, and consumer polarization. The pandemic resulted in the emergence of consumer polarization where some consumers scaled up to purchase expensive products. Furthermore, the pandemic-induced increased cooking at home has been a major growth driver for the market growth. We now see grocery retailers moving beyond the core by entering new categories, developing new sourcing strategies, expanding into consumer services, and selling B2B services that harness their strengths.

Grocery & Convenience Stores – 2022 U.S. Market Research Report with Updated COVID-19 Forecasts

In the initial stages of the pandemic, grocery shoppers chose where to shop based on in-stock products, store hygiene, and cleanliness procedures. Furthermore, as consumers look ahead to their food consumption in 2021, they are leaning toward “better for you” options. According to our survey, the net intent to focus on healthy eating and nutrition is expected to be up 38 percentage points over 2020, with consumers specifically seeking out naturally healthy, high-protein, low-sugar, and low-calorie foods. Companies beyond those known for their environmental, social, and governance (ESG) policies—such as Ben & Jerry’s, FedEx, and LEGO—are increasingly making more decisions based on social and environmental issues compared with 2020.

About 40 percent of consumers expect to increase their focus on healthy eating and nutrition. Consumers intend to purchase more regional and local goods (41 percent), high-protein options (34 percent), and offerings that are free from certain ingredients (33 percent), along with other naturally healthy options (Exhibit 3). This combination of saving money and eating healthier, more nutritious foods is more prevalent among millennial and Gen Z consumers, in part because they are still waiting for their finances to return to normal. With continued uncertainty around the COVID-19 pandemic and grocery inflation the highest it has been in ten years, consumers have become more focused on shopping for the best value in an effort to stretch their dollars (Exhibit 2). Moreover, 90 percent of CEOs expect increasing pricing pressure from consumers to continue in 2022. When choosing where to shop in the year ahead, 45 percent of consumers indicate they plan to explore more ways to save money, a level virtually unchanged from the year before.

Grocers gained significant “share of stomach” during the pandemic as consumers across North America shifted to living, working, and learning at home. In an industry that has traditionally seen growth of 1 to 2 percent a year, North American grocery grew by approximately 12 percent in 2020, offsetting significant reductions in food away from home.1Kantar Retail IQ database. Consumers are driving the development and acceptance of new grocery delivery models to match their retail and service consumption patterns.