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Supermarket Industry Analysis

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Supermarket Industry Analysis

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  • May 12, 2011
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From the report of the Progressive Grocer, a monthly industry publication, we can know that in 2009, 35,612 supermarkets were in business in the United States, which accounted for 54.5% of food item sales by grocery stores including supercenters and warehouse outlets. Convenience stores had 31.9% of sales, and wholesale clubs had11.5% of sales. So, supermarkets overall account for more than half of all food sales.

Market definition
In general, we believe that a supermarket is a large comprehensive retail store that sells a wide variety of goods including food and alcohol, medicine, clothes, and other household products that are consumed regularly. Customers can use the most comfortable and free way to choose goods by themselves in the supermarket. It is the most popular way for retailer in developed countries. And, the Standard & Poor’s industry surveys define that the US supermarket industry includes a range of businesses, from small grocery shops and convenience stores to large supermarket chains, excluding restaurants and department stores that sell gourmet foods. Through the definition of supermarket, we can know that supermarket is not only a market; it covers many different industry areas. We want to analyze a single market, and, according to the North American Industry Classification System (NAICS), the supermarket industry is found in section 445110: Supermarkets and Other Grocery (except Convenience) Stores. NAICS states that “This industry comprises establishments generally known as supermarkets and grocery stores primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry. Included in this industry are delicatessen-type establishments primarily engaged in retailing a general line of food”. It means that supermarkets mainly sell food. So, I will choose the definition of supermarket industry in the NAICS and just focus on food retail....