The U.S. food retail sector experienced substantial consolidation over the last three decades, according to data from USDA’s Economic Research Service.
Market concentration, as measured by the Herfindahl-Hirschman Index, is a measure of the extent to which market shares are concentrated between firms of the retail food sector at the national, state, metropolitan statistical area, and county levels. The analysis includes all establishments with a significant portion of food sales that are likely substitutes for each other: supermarkets and other grocery and warehouse clubs and supercenters.
Although the national market is less concentrated than the average State level, according to the HHI, national market concentration increased substantially between 1990 and 2019 at 458 percent. In comparison, average county-level market concentration has remained relatively constant over the past 30 years, increasing only 94 percent.
While national measures provide information about larger trends, trends in localized markets are likely more relevant for consumers, food-retail competitors, and policymakers, according to USDA.