Companies in this industry operate retail stores that offer a general selection of food products. Major companies include Kroger, Safeway (owned by Albertson's), and Publix (all based in the US), as well as Carrefour (France), Tesco (the UK), Lidl and Aldi (Germany) and AEON (Japan).
Population growth and consumer tastes drive demand. Intense price competition keeps margins low. As such, 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% of revenue.
Products, Ops & Technology
More than two-thirds of products sold by grocery stores are food items, including meats (11% of overall sales); produce (10%); dairy products (7%); and frozen foods (5%). Nonfood items include health and beauty products, general merchandise, medication (including prescription drugs), and fuel, at some locations. Fuel may account for a significant percentage of overall sales. At Kroger, for example, 13.5% of sales came from fuel in 2015.