Phoenix-area grocery stores saw boost in pandemic sales, 2021 market share report shows

20 | 04 | 2021

Grocery stores may have arguably been the most essential of all the essential businesses during the pandemic, and even though this past year put a lot of strain on their workers, it paid off with a significant increase in sales.

Article originally posted here.

The Phoenix-area grocery sector (including supermarkets, mass merchandisers and warehouse clubs) clocked more than $15.1 billion in revenue in 2020, according to the just-released 2021 market report by sales tracking firm Chain Store Guide. That accounted for an increase of $557.9 million, or 4%, from the previous year’s sales.

Of the 17 grocery store chains in the Phoenix metro area that are tracked by Chain Store Guide, only four saw sales decrease year over year between 2019 and 2020. But some companies saw bigger increases than others and those stores saw their market share increase as well.

Fry’s Food Stores increased its dominance in the market in the past year, adding an additional store and seeing sales increase 9.8% to $4.2 billion. Chain Store Guide calculated that Fry’s owns 27.8% of the market, the most of any grocery store.

Last year’s report saw Fry’s losing some of its market share to Walmart, but in 2020 Walmart Inc. (NYSE: WMT) had a store close and its market share dropped from 19.3% to 19.1%.

But it wasn’t just Walmart that slipped, according to the report, Fry’s, which is owned by Cincinnati, Ohio-based Kroger Co. (NYSE: KR), saw gains in market share while Safeway, Costco, Bashas’ (including AJ’s Fine Foods and Food City), Target, WinCo, and (Nasdaq: AMZN)-owned Whole Foods all saw their market share decrease.

The Phoenix area has long been categorized as one of the most competitive markets for the grocery industry in the country, and this data shows that every store is affected by market moves made by their rivals.

The only grocery chains besides Fry’s to see an increase in market share in 2021 were Phoenix-based Sprouts Farmers Market (Nasdaq: SFM) and Walmart-owned Sam’s Club.

A key newcomer to the Phoenix area, German specialty grocer Aldi, was not specifically accounted for in this report but may factor in next year’s numbers.

Aldi opened its first stores in Phoenix in the fourth quarter of 2020. To date, the chain has opened four in the Valley, but is ready to open another 10 in the next few years. Aldi has spent more than $35 million on land and has signed at least two leases to make a significant splash in the Phoenix market over the next few years.

A number of existing grocers are growing in the Valley as well. Fry’s has plans to open a new store in Buckeye in May and has purchased land in North Phoenix for another store. Sprouts has plans to build a store in Maricopa this year, as well as relocate a store to a new location in Northwest Phoenix near the Arizona State University West Campus.

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