2014 Grocery Sales Start Strong

The Lempert Report
April 07, 2014

But there's still competition!

For Grocery Stores, 2014 got off to a strong start. The Food Institute reports from Government data that for the first two months of 2014 sales rang up $94.8 billion. That's 3.4% more than the same two months in 2013 and a significantly larger gain than the small 2.1% rise in the first couple of months in 2013.

Throughout the year, grocers may benefit from increased food inflation, beef and pork prices are both poised to climb in the wake of anticipated tighter supplies. But that doesn't mean grocery stores will be without competition. For example, so-called 'alternative retailers' continue to impact the grocery industry. In the first look at 2014 for the sector, January sales at warehouse club and super-center sales moved 3.2% higher. The Food Institute estimating some $17.0 billion in food sales. There's also drug stores and pharmacies who had sales up 3.6%, and an estimated $1.7 billion in food sales. 

E-Sales surprised us with a small 1.5% increase in e-shopping and mail order sales during the month. Food sales still account for only a small portion of overall e-sales, however, about $418 million based on Food Institute estimates but growing.

So while Grocery Stores may be off to a strong start in 2014, they are not without a strong competition. Grocery stores need to continue to appeal to their customers and keep giving them reason to return if they want to carry this lead through the year.