Specialty Food Stores Industry Profile

Companies in this industry sell meat, fish and poultry; produce, baked goods, candy, and gourmet foods from physical retail locations. No major companies dominate the industry. Sales of specialty foods have been increasing worldwide as demand for ethnic foods has continued to grow. In part, the increase comes from immigrant consumers seeking out foods from their own cultures. Ethnic food sales are growing at 14 percent a year in Europe and 5 percent in the US, according to Datamonitor.

The US specialty food store industry includes about 25,000 stores with combined annual revenue of about $20 billion. US personal consumption expenditures at specialty food stores are forecast to grow at a low rate in the next two years. Challenges for the industry include competition from other retailers.

The industry includes meat markets, seafood markets, fruit and vegetable markets, baked goods stores (but not retail bakeries), candy and nut stores, and gourmet food stores. Grocery stores and supermarkets, along with superstores and warehouse clubs that sell food, are covered in separate industry profiles.

COMPETITIVE LANDSCAPE

Consumer spending and tastes drive demand. The profitability of individual companies depends on effective merchandising and the ability to generate store traffic. Large companies can offer a wide selection of products and have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by offering specialty products, providing superior service, or serving a local market. The industry is ...