It’s no secret that the last three years have been turbulent for the grocery world, despite growth for many retailers and their collection of private brands. High inflation, labor shortages and fuel costs have all impacted grocers of all sizes recently.
At the National Grocers Association’s recent NGA Show 2023 in Las Vegas, Scott Moses, managing director of Grocery, Pharmacy and Restaurants at investment firm Solomon Partners, detailed 12 takeaways for retailers to think about for the remainder of 2023.
“In the spring of 2020, we didn’t leave our apartment building in New York City for ten weeks,” Moses recalled. “I did see first-hand the extraordinary work my clients did all around the country to feed and help sustain their communities, in yet another crisis. There’s no overstating it: this industry really matters, so let’s talk about what’s happening to it.”
- Macro, Micro and Cost of Capital Challenges on Traditional Grocers
- Inflation Not Only Caused By Ukraine; Low Labor Participation and Immigration
- Non-Traditional "Grocery Giants" - Majority of US Grocery Sales
- 10 of 15 Top American Grocers are NOT Traditional Supermarkets
- Dollar Grocery Stores' and Club Stores' Meteoric Growth
- Non-Traditional Grocery Giants - "Primary Shop" >60% of Americans
- Grocery Giants' Very Low Cost of Capital Fueling Investment Arms Race
- Amazon's $1 Trillion Valuation Many Multiples Other Grocers; Huge Investments
- Supermarkets' EBITDA Margins Were 75% Higher 20 Years Ago vs. Pre-COVID
- U.S. Grocery Sector Today Looks Like Department Stores 30 Years Ago
- FTC Knows Amazon Impact on Grocery; Can Help Level Grocery Playing Field
- Millions of Americans Rely on Grocery Jobs - Pillars of Our Communities
“You probably know that food inflation didn’t start with Ukraine, and we had COVID supply challenges long before. Food inflation was 8.6% that month,” said Moses, speaking on the macroeconomic trends that impact the retail landscape. “You might not know that there are 11 million open jobs in the U.S. right now and only 6 million job-seekers. Irrespective of your politics… it is undeniable that more immigration would really help close that worker gap. It would alleviate some food inflation in stores, and it would help lower prices for consumers.”
In his keynote presentation, Moses described the grocery industry as fragmented, and cited the growth of non-traditional chains, such as Amazon, and dollar chain grocers as part of the cause. He said that 60% of Americans now shop at a non-traditional grocer, an increase from less than 20% 20 years ago.