In the produce aisle, supermarkets' dollar share is shrinkingIn the produce aisle, supermarkets' dollar share is shrinking

The base of shoppers who visit traditional grocery stores for fruits and vegetables is gradually eroding.

Grocery stores’ share of total produce dollar sales fell from 42.9% in 2020 to 41.1% in 2023, reported the Power of Produce 2024 report, published by Arlington, Va.-based FMI—The Food Industry Association.

In contrast, mass merchandise/supercenter outlets’ dollar share rose to 20.1% from 17.4%, and club stores had a share increase to 11% from 10%. Online sales rose to 2.4% from 1.7%.

Other channels losing share include discount grocery, with a decline from 10.2% to 9.9%; specialty stores, decreasing from 1.9% to 1.7%; and health/organic specialty stores, going from 4.6% to 3.6%.

“Consumers purchase fresh produce at an average of two to three different store channels—illustrating the fractured nature of the fresh produce dollar,” the report stated. “While supermarkets remain the most commonly shopped, mass/supercenters gained big with 57% of Americans shopping there for fresh fruit and vegetables versus 50% in the 2023 study.”

“The shift to buying more produce from mass merchants and club stores is not because traditional stores are doing anything wrong; it is just that these other formats have a specific formula for success which includes the efficiencies coming from selling larger bulk packages,” said Russell Zwanka, associate professor—food marketing, and director of the food marketing program at Western Michigan University in Kalamazoo. 

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The greater merchandising of produce in a wider array of retail channels will spur operators to alter their marketing strategies to stand out in the increasingly competitive market, he said, particularly because produce is a key reason why many shoppers visit specific outlets. “Competition makes you stronger,” Zwanka said. “Doubling down on what makes a retailer special is always the best place to start.”

Supermarkets, for instance, can enhance and spotlight their displays of locally grown produce or offer more unique varieties, which are areas that club and mass formats “do not inherently lean towards,” he said.

Regardless of the channel, fresh produce purchasing is likely to increase because of the greater shopper focus on health and wellness, he said. Yet, consumer interest in sustainability and waste reduction also will limit sales, Zwanka said.

“So much of what is grown rots before it can be consumed, forcing some customers to shift to frozen vegetables and fruits,” he said. “Having produce in a frozen state allows shoppers to always have produce available for meals without worrying about loss.”

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