Retail food sales make up 7.2 percent of GDP, more than any other retail sector including automobiles. This sector employs over 15 percent of all workers with over 12 percent working at the retail end. The top four chains, Kroger, Safeway, Albertson's, and American Stores captured 17 percent of total grocery sales. These four chains have been among the top 5 grocery companies since 1976. Economies of size, distribution and management fosters continuing consolidation on a regional basis, but food, like politics, is a local business.
Real competition is considered to be within three miles of one's store.
The percent of total market shared by the four largest chains is a standard measure of concentration in an industry. Among these 100 metropolitan areas 24 had concentration ratios of over 80 percent including 4 areas that were over 90 percent. We can expect continued buyouts and mergers and reorganizations. Supermarkets are getting bigger, with median store size now over 38,000 square feet. Club stores and supercenters have between 100,000 and 200,000 square feet with at least 40 percent of it devoted to groceries.