III. Industry Analysis
The Grocery Stores industry has grown over the past five years, benefiting from a strengthening economy for most of the period. As per capita disposable income has increased, many consumers have shifted to premium, organic and all-natural brands, helping lift industry revenue.
Despite various economic factors that have supported industry revenue growth, rising competition and changing consumer preferences have posed a threat to many operators, forcing them to generate revenue in new ways. For example, many large national grocery chains have offered big discounts and promotions to drive foot traffic to their stores and strengthen consumer loyalty.
Over the next five years, industry revenue is anticipated to grow steadily, resulting from rising discretionary income and consumer preferences. As health concerns intensify, more consumers will likely seek all-natural and organic products. Operators are also anticipated to benefit from steadier commodity markets that will likely cause input costs to rise much more conservatively.