How Grocery’s “Big 3” Make Their Marks

Where are the grocery sector’s biggest players at their strongest? That’s the central question underlying a new white paper from Placer Labs Inc. titled “Banner Variety Within 3 Grocery Giants,” which delves into the top chains within Ahold Delhaize, Kroger and Albertsons, looks at which holding companies are most active in each market and examines the different functions played by the holding companies’ various banners.

Here are five key takeaways from the study:

• The grocery industry in the United States is highly diverse. No single grocery holding company controls the U.S. grocery market. Instead, the space is divided between independently owned national chains, local grocery brands and holding companies operating a variety of regional banners.
• Different store formats can serve different functions. The Kroger Co. operates four grocery formats within its grocery ecosystem. Each format serves a unique function, caters to different grocery needs, and attracts a unique demographic segment. The Kroger Co.’s banner diversity also allows the company to reach a variety of audiences through its in-store retail media network.
• Families with children may be particularly sensitive to grocery pricing. The Kroger Co.’s two price-impact warehouse store banners are seeing significant visit growth, perhaps thanks to the outsize share of households with children among their shoppers.
• Different banners may attract different audiences – even in the same geographic locations. A variety of shoppers visit the Albertsons Companies’ grocery brands, with different banners in the same state attracting audiences of different income levels.
• Grocery chains serving rural shoppers may be well-positioned for future growth. Ahold Delhaize’s fastest growing grocery brand, Food Lion, also caters to the largest share of average-rural shoppers – which may be one of the factors driving its success as more families continue seeking affordable housing in lower-density areas.

Editor’s note: The study does not examine the potential impact the still-pending merger between Kroger and Albertsons would have on the industry.

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