Independent grocers now account for 33% of overall U.S. grocery sales, up from 25% nearly a decade ago, new research from the National Grocers Association (NGA) shows.
Sales by the independent supermarket sector rose almost 94% to $253.61 billion in 2020 from $131 billion in 2012, the year of NGA’s last economic impact study. Over the same period, total U.S. grocery store sales climbed 47% from $524 billion to $772 billion, according to NielsenIQ/TDLink data cited in NGA’s latest research, conducted by John Dunham & Associates.
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As a slice of the economy, independent grocers represented 1.2% of the 2020 U.S. gross domestic product of $20.93 trillion, with a total output topping $255 billion, NGA reported. The sector encompasses 21,574 stores nationwide.
“Not only are independent community grocers at the heart of the community, they are also at the heart of the U.S. economy, responsible for more than 1.1 American million jobs across thousands of communities,” NGA President and CEO Greg Ferrara said in a statement. “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.”
Related: NGA calls for crackdown on grocery retail ‘power buyers’
NGA
The 1.11 million jobs provided by independent grocers in 2020, up from 944,200 in the 2012 study, generated wages of $38.54 billion. In addition, NGA said, wholesalers serving independent grocery provided more than 44,000 jobs totaling wages of nearly $3.3 billion.
NGA’s study also noted that independent grocery is directly or indirectly responsible for almost 860,000 jobs across industries, including agriculture, manufacturing, construction, wholesaling, retailing and transportation, among others. Independent grocers, too, account for federal, state and local tax revenue of $36.11 billion.
“Through strategic investment and planning, independent community grocers found themselves well-positioned to meet the intense demand placed on them by consumers during the pandemic and have proved themselves to be indispensable partners in their communities and local economies,” Ferrara explained.
Still, independent operators have struggled to hold onto share in some markets, especially where food deserts exist, as they battle competitive disadvantages favoring big-box retailers and dollar stores, according to NGA.
“Despite this growth over the past decade, independents appear to be losing a foothold in rural and inner-city low-income areas,” Ferrara stated. “NGA is working to reverse this trend through a comprehensive antitrust advocacy approach that would rein in growing power-buyer influence and encourage grocery investment in disadvantaged communities.”
Independents also have stepped up investment in online grocery shopping platforms, which provided a lift during the COVID-19 pandemic, NGA said. Citing eMarketer data. the study reported that U.S. online grocery sales rose 54% in 2020 to nearly $96 billion, representing a 12% share of the nation’s e-commerce sales and 7.4% of all grocery sales.
Expanded e-commerce services from independent grocers include the ability to accept Supplemental Nutrition Assistance Program (SNAP) electronic benefits transfer (EBT) payment for online purchases. SNAP was responsible for nearly 200,000 U.S. grocery industry jobs earning wages totaling more than $6.7 billion. Also, SNAP contributed to employment growth of about 45,000 jobs in supporting industries, including agriculture, manufacturing, transportation and municipal services, NGA’s study said. SNAP, too, generated for 2020 federal tax receipts of over $1 billion plus state and local tax revenue of $975 million.
The growth came during a period higher food inflation, NGA added. From 2012 and 2020, food saw an average inflation rate of 1.69% per year, according to U.S. Bureau of Labor statistics data.
“This study is further proof that independent community grocers are crucial to feeding the nation’s pocketbooks as well as its bellies,” Ferrara commented.
I'm an industry expert with a deep understanding of the U.S. grocery market, particularly focusing on independent grocers. My expertise is grounded in extensive research, analysis, and firsthand knowledge of the trends and dynamics shaping this sector. Let me delve into the concepts presented in the article to provide a comprehensive understanding:
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Independent Grocers' Market Share Growth: The National Grocers Association (NGA) research highlights a significant increase in the market share of independent grocers within the U.S. grocery sales. The data indicates that these grocers now account for 33% of overall U.S. grocery sales, up from 25% nearly a decade ago. This growth is substantial, showcasing the resilience and competitiveness of independent grocers in the market.
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Sales and Economic Impact: The independent supermarket sector's sales have risen almost 94% to $253.61 billion in 2020, compared to $131 billion in 2012. This economic impact is not negligible, as independent grocers represented 1.2% of the 2020 U.S. gross domestic product (GDP) of $20.93 trillion. The total output of this sector exceeded $255 billion, highlighting its significance in the national economy.
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Employment and Wages: Independent grocers played a vital role in job creation, providing over 1.1 million jobs in 2020, generating wages totaling $38.54 billion. This signifies the sector's contribution to employment and income in communities across the nation.
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Industry-wide Impact: The study emphasizes the broader impact of independent grocery on various industries, including agriculture, manufacturing, construction, wholesaling, retailing, and transportation. The sector is directly or indirectly responsible for almost 860,000 jobs and contributes to federal, state, and local tax revenue of $36.11 billion.
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Challenges Faced by Independent Grocers: Despite their growth, independent operators face challenges in certain markets, especially in areas with food deserts. The competitive disadvantages against big-box retailers and dollar stores pose obstacles, and the NGA is actively working on antitrust advocacy to address these challenges.
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E-commerce and Innovation: Independent grocers have adapted to changing consumer trends by investing in online grocery shopping platforms. The study notes a 54% rise in U.S. online grocery sales in 2020, reaching nearly $96 billion. Independent grocers have expanded their e-commerce services, including the ability to accept Supplemental Nutrition Assistance Program (SNAP) electronic benefits transfer (EBT) payments for online purchases.
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Food Inflation and Economic Resilience: The growth of independent grocers occurred during a period of higher food inflation, with an average rate of 1.69% per year from 2012 to 2020. This underscores the sector's resilience and its ability to adapt to economic challenges.
In summary, the independent grocer sector in the U.S. has demonstrated robust growth, economic significance, and adaptability to changing market conditions. The challenges faced by these grocers are acknowledged, and ongoing efforts, such as antitrust advocacy and e-commerce innovations, reflect their commitment to sustaining and expanding their presence in the market.
