T. Ozbun
Research expert covering food retail and all food topics for Italy and Brazil
Discount grocery stores in the U.S.
Discount grocery stores, although not as popular as in Europe and especially Germany where many leading retailers originate from, have emerged as significant players in the U.S. food retail market. The United States is the second-largest market for this retail channel, and is expected to grow steadily in the foreseeable future. The increasing cost of living and budget limitations resulting from the rise in inflation rates, especially in 2022, may be one reason behind the forecast growth of the discount grocery market in the U.S. This can be seen in the behavior of grocery shoppers, with over one-third of respondents in the country switching to cheaper stores to cut back on spending, and with a noticeable increase in the frequency of visits to these affordable format stores, particularly during the period of highest inflation.
The growth of the discounters
While the U.S. discount market was once dominated by dollar stores, supercenters, and discount department stores, it has recently transformed into a market with a major presence of European discount supermarket chains such as Aldi and Lidl. Although it opened its first store in Iowa in 1976, Aldi has risen to prominence only in the past decade, when it nearly doubled its number of stores within a decade, now covering most of the contiguous United States. Its sales, which have grown at significant rates in recent years, are set to trail right behind the country's major supermarket chains. Lidl, on the other hand, with a much smaller presence in terms of number of stores and concentrated mainly along the East Coast, has shown with its exceptionally high sales growth in recent years that it is destined to become a potential leading player in the U.S. discount grocery market.The enduring locals
Despite the rise of the two German discounters, local discounters have not yet pulled back, quite the contrary. Grocery Outlet, which thanks to its growing number of stores located in the region where the other two are not, the western U.S. states, has shown good growth in annual sales. And the dollar store leader, Dollar General, whose impressive store count made it the leading retailer with the most stores in the United States, has allowed it to maintain fairly positive sales growth and still remains as one of the leading discount grocery stores in terms of sales.
