Kroger moves up on NRF 2023 Top 100 Retailers list

The Kroger Co., the nation’s largest supermarket operator, came in behind Walmart, Amazon and Costco Wholesale as the four biggest U.S. retail chains by sales in the National Retail Federation (NRF) 2023 Top 100 Retailers list, which was released Wednesday.

While Walmart ($499.65 billion in 2022 U.S. retail sales), Amazon ($232.46 billion) and Costco ($164.15 billion) repeated in the top three spots from a year ago, Kroger ($147.62 billion) this year climbed one slot to No. 4, pushing The Home Depot ($145.94 billion) down a space to No. 5. Also moving up one rung in the top 10 on the 2023 list, compiled by consultancy Kantar, were Target ($107.59 billion) to No. 6 and CVS Health ($106.18 billion) to No. 7 as Walgreens Boots Alliance ($103.91 billion) slipped to No. 8.

Rounding out the top 10 chains by U.S. retail sales were Lowe’s Cos. ($89.28 billion) and Albertsons Cos. ($76.15 billion), coming in at Nos. 9 and 10, respectively, the same as in the 2022 list.

Food, drug, mass and convenience retailers accounted for 41 of the 100 spots and 16 of the top 25 companies. Kroger and Albertsons were the only supermarket operators in the top 10 but were part of six grocery store chains in the top 20, also including Ahold Delhaize USA ($57.21 billion) at No. 12, Publix Super Markets ($54.53 billion) at No. 13, Aldi U.S. ($40.21 billion) at No. 15 and H-E-B ($34.79 billion) at No. 18.

Grocery retailers making the list for 2023 but not last year—mainly due to acquisition activity—included Chedraui USA ($7.45 billion), parent of Smart & Final, El Super and Fiesta Mart, at No. 57; Northeast Grocery ($7.20 billion), formerly Golub Corp. and now parent of Price Chopper/Market 32 and Tops Friendly Markets, at No. 58; Raley’s Cos. ($5.53 billion), parent of Raley’s and Bashas’, at No. 77; and Schnuck Markets ($4.02 billion) at No. 99. The Save Mart Cos. was on the 2022 list at No. 97 but fell off the list this year.

From the National Retail Federation

Big-box chains bolster share

“Collectively, retailers were consistent across the board last year because most everybody grew, and at more or less the same rate,” David Marcotte, senior vice president at Kantar, said in a statement. “The dynamic category to watch is big-box, particularly as customers become more comfortable with the value proposition of membership fees.”

Indeed, Marcotte noted that big-box chains—including mass merchants and warehouse clubs—have seen strong growth in the United States as well as internationally. For example, NRF reported, comparable-store sales rose 8.2% for Walmart and 10% for Costco in 2022.

“People are comfortable putting out the membership fee to buy into the value proposition,” he told NRF, adding that wholesale clubs have “a great deal more room for expansion.”

Aldi on the march

NRF described Germany-based discount grocer Aldi as gaining U.S. market share “through an under-the-radar strategy.” Aldi edged up to No. 15 on this year’s list from No. 16 last year as U.S. sales advanced 8.1% to $40.21 billion, driven in part by 4.3% growth in its U.S. store count.

In early May, Aldi unveiled plans to open 120 new stores in 2023, adding onto 139 opened in 2022. The company said the additions stand to extend its store base to more than 2,400 locations by the end of this year. That growth has been fueled by a retail model that, most recently, has proven especially attractive to inflation-weary consumers: offering a unique, curated selection of high-quality, private-label products in a compact store format and drawing customers with hard-to-match, everyday-low prices and a simplified shopping experience.

That approach has generated strong brand loyalty among consumers, who appreciate Aldi’s low prices in addition to its roster of private brands and selection of specialty items, such as imported goods in seasonal aisles, according to Marcotte.

“They can’t take chances,” he explained to NRF. “They need to know what they’re buying, and it’s one of the reasons they tend to be so brand-loyal.”

Aldi has steadily expanded its U.S. footprint over the past six years, bringing its low-price model to more American consumers. / Photo by Russell Redman

International operators eye U.S. investment

Marcotte also pointed to increased interest in the U.S. food retail market by international retailers. He cited Grupo Comercial Chedraui’s acquisition of Smart & Final, which put the company at No. 57 on NRF’s 2023 Top 100 list, with 137.3% U.S. sales growth in 2022 and 205.7% growth in U.S. stores—and 59% of its global sales coming from the U.S.

Chilean retailer Cencosud also acquired a majority stake in The Fresh Market in mid-2022, and Femsa—owner of Oxxo convenience stores in Mexico— is “very, very bullish on moving into the U.S.,” Marcotte reported.

And big, foreign-owned convenience retail players are primed for more U.S. activity, he added.

“7-Eleven [No. 19] and Circle K [owned by Alimentation Couche-Tard, No. 42] have longstanding international investment in the U.S. That’s not new,” Marcotte told NRF. “What is new is that both are aggressively trying to expand their U.S. footprint.”

Drug chains still challenged

Labor shortfalls in core pharmacy operations have led the big three U.S. drug store chains—CVS, Walgreens and Rite Aid—to scale back locations, Marcotte observed, though only Walgreens dropped in the 2023 list (from No. 6 to No. 8), while CVS rose a spot to No. 7 and Rite Aid remained at No. 29. The drug chains also have struggled to generate consistent front-end sales growth.

“You cannot run a drug store without a pharmacist, and there’s been a severe shortage of pharmacists in all three chains,” he explained, citing shortened hours and closed stores.

Cash flow for remodels has been lacking as well, and CVS and Walgreens have embraced automated prescriptions to alleviate labor shortages, according to Marcotte. “But it’s still a tough market,” he added.