RETAIL SALES TIPS FROM: RETAIL INSIGHTS
Industry Insights Largest Growth:NATURAL ORGANICS GROW 5.26%
While total US retail food stores grew 2% in 2018, natural organic products grew 5.26%—more than 2.5 times the rate. New natural organic food sales totaled $4.15 billion, or nearly one-third (31.7%) of the $13.1 billion total new retail food dollars sold in the US in 2018. Put another way, shoppers spent nearly one of every three new food dollars on natural organic foods.
Tech: AMAZON WHOLE FOODS STEAMS AHEAD
In December 2018, Amazon closed out its first full year as owner of Whole Foods Market, growing US store count by 39 units, to 476 from 437 in 2017. While the company no longer shares much specific sales data, we estimate Whole Foods added $1.77 billion between new stores and same-store-sales growth, to reach $17.8 billion in sales, or just over an 11% increase for 2018.
Top: SUPERNATURAL CHANNEL LEADS GROWTH
Whole Foods is part of what we classify as the supernatural channel; large specialty stores with an emphasis on fresh foods. Sprouts Farmers Market, the second largest supernatural, added 30 stores, to reach 315 total units. We estimate Sprouts will add $588.8 million, for a 12.7% increase, to reach $5.2 billion in 2018. Altogether, Whole Foods, Sprouts, Earth Fare, Fresh Thyme and the other Supernaturals we estimate will hit $25.9 billion in 2018, adding $2.4 billion in sales, for a 10.26% year-over-year increase, and capturing the leading 31.17% share of all natural organic sales in the US, supernaturals actually slowed the number of new store openings in 2018, to 76, down from 97 new stores in 2017. But each one of these new stores in 2018 was much bigger, averaging 33,830 square feet, a 50% increase from the 22,340 square foot average new store in 2017.
Perhaps this is because amazon unleashed the new- store pipeline, which Whole Foods’s management had curbed prior to being acquired.
Second: CONVENTIONAL GROCERS RETAIN 2ND PLACE MARKET SHARE
Conventional supermarkets such as Kroger, Publix, Safeway, and Wegmans, retained their 2nd place natural market share, at 19.7%, with $16.3 billion in natural organic sales. These traditional food stores added $921.8 million in natural organics, a 5.96% increase over 2017.
Third: COMPACT GROCERS MOVE UP TO NO. 3
Slot compact grocers, those stores with less than 20,000 square feet gross lease area (GLA)—just under half the 45,000 square foot average of the typical supermarket— snuck into 3rd place at a 14.17% share, and $11.78 billion in natural organic sales. Stores in this group include natural grocers by Vitamin Cottage, Trader Joe’s, and other compact, multi-unit chains with significant natural sales. Year-over-year growth in natural organic sales was a fairly modest 3.35%.
Fourth: INDEPENDENTS AND CO-OPS SLIP TO NO. 4
We saw a net loss in store count for independent natural products retailers and co-ops in 2018, closing a net 142 stores, or just over 2%. However, the remaining independents reported 1.6% average growth, meaning that net slippage in sales for the channel was just (-$40.1) million, or less than 1% (-0.35%.) independents continue to account for $11.44 billion in sales, and a 13.76% share of the natural organic market.
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WHAT’S IN STORE | 2020
Industry Landscape
© 2019 International Dairy Deli Bakery Association
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