Amazon to shake up grocery retail despite major retailers still leading

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Amazon to shake up grocery retail despite major retailers still leading

Things in the U.S. grocery world are becoming more and more competitive as powerhouse retailers anticipate disruption from Amazon, reports Business Insider

A newly released UBS report details that Walmart and Kroger remain the top leaders in the industry, with their combined market share accounting for about 30% of the sector - a number consistent since 2017.

Walmart - combined with its Sam's Club chain - still dominates with 21.3% of the market last year. Kroger comes in second with a share of 9.9%.  

In contrast, Amazon and Whole Foods held 2.2% of the U.S. grocery market. This is up from 1.6% in 2017, it reports.

For grocery discounters like Lidl and Aldi, rapid expansion and increasing pricing pressure are expected into the future. On the other hand, the report predicts that regional chains like Wegmans and Publix will gain in market share.

The extensive document written on the U.S. grocery industry outlines the main trends, highlighting that Amazon is expected to "cause disruption". They attribute this to the fact that the chain is expanding its cashierless Amazon Go stores and will open its first conventional supermarket in 2020.

"We expect the food retail sector to face challenging conditions in 2020," the article quoted from a UBS analyst.

In these conditions, online sales will be increasingly important despite only making up 4% of food retail sales, the analyst said.

A large percentage of sales also come from independents and smaller chains - making the market rather fragmented, UBS analysts say.

To read the full article, click here.

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