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Companies in this industry operate retail stores that offer a general selection of food products. Major companies include Kroger, Safeway, and (all based in the US), as well as AEON (Japan), METRO (Germany), Royal Ahold (the Netherlands), and Tesco (the UK).
Global grocery store and supermarket sales total about $2 trillion annually. The leading 15 retailers account for more than 30 percent of worldwide sales.
The US retail grocery industry includes about 65,000 supermarkets and other grocery stores with combined annual revenue of about $550 billion. Key growth drivers are consumer spending habits and food trends.
Discount stores and warehouse clubs, which are leading sellers of groceries, are covered in separate industry profiles.
Population growth and consumer tastes drive demand. Because margins are low, the profitability of individual companies depends on high volume sales and efficient operations. Large companies can offer a wide selection of products and have advantages in purchasing, distribution, marketing, and finance. Small companies can compete effectively by offering specialty products, serving a local market, or providing superior customer service. The US industry is concentrated: the 50 largest companies generate about 70 percent of revenue.
Discount stores and warehouse clubs have aggressively pursued the retail grocery market, and Wal-Mart is the largest seller of groceries in the US. Other competition includes specialty food stores, convenience stores, drugstores, dollar stores, and, to some degree, restaurants.
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