Op-Ed: The grocery chain wars prove that the modern supermarket model isn’t sustainable
While we’ve discussed many ways the grocery industry is facing a crisis of sorts, we haven’t addressed how our national grocery system works. After all, we’re not talking about a single chain here.
The national grocery store model is made up of the corner store–independent grocer–and supermarket chains. While these three groups aren’t necessarily distinct from each other, in a way they are, because they share the same chain owner and operate from the same general region (or vice versa), they aren’t separate chains. They are, in fact, a single chain: The Kroger or Safeway model.
Kroger’s growth over the past few decades in grocery market share (and its grocery share in particular) is staggering. Its share has grown by more than 60% in the last decade alone, with most of the growth occurring between 2004 and 2014. Its growth rate has generally moved down in recent years as the company has transitioned to new marketing platforms. (In part, this is because the company’s growth was limited by the recession, a trend that continues.) Kroger now sells in more than 200 countries worldwide.
Safeway’s growth has been similarly staggering in recent years as well, with many of the company’s growth moving on to new marketing platforms. During this same period, Safeway now sells more than 5,000 own-brand and generic stores, or nearly 20% of the supermarket market, while Kroger has gone from selling only 1% of the market in the 2000s to more than 60% in the 2010s.
While both Safeway and Kroger are national grocery chains, we will for now limit our discussion to Kroger. (In fact, we’ll be writing multiple posts in the coming weeks discussing the effects of competition on the grocery industry overall.) We’re not the only ones to notice. Kroger’s share has fallen steadily in the last three years, and is now just over 40% of the market versus more than 50% in 2000 and the high-water
