Guide to Grocery Industry KPIs
This guide highlights the key performance indicators for the Grocery industry and where investors should look to find an investment edge.
Industry Overview
The grocery industry is a subset of the larger retail industry and comprises food retailers, including hypermarkets & supercenters. For a primer on the more extensive retail industry, please refer to our guide on Retail KPIs. Food retailers are retailers that primarily focus on the sale of food and groceries, which make up the majority of sales. It includes supermarkets, convenience stores, discount stores, and cash & carries or wholesale operations. Food retailers also include hypermarkets and supercenters, which are broken out into a separate sub-industry on Visible Alpha Insights. Hypermarkets and supercenters are large-scale stores that sell a variety of general merchandise and food products, with a considerable portion of sales coming from groceries. These stores sometimes also have expanded offerings including service counters, pharmacies, and florists.
The grocery space has been rapidly evolving with the change in retail and consumer dynamics. Hypermarkets and supercenters are increasingly expanding their online delivery options, by partnering with delivery intermediaries and expanding the capacity of their existing online grocery operations. Grocers are enhancing frictionless shopping environments, blending online and offline functionalities with new shopper touchpoints, particularly in purchase and payment processes, to drive customer experience and visit frequency.
Key Grocery Industry Metrics
Key performance indicators (KPIs) are the most important business metrics for a particular industry. When understanding market expectations for grocery retailers, whether at a company or industry level, some KPIs to consider include:
- Traffic Growth (%)
- Ticket Growth (%)
- Comparable-Store Sales Growth (%)
- New Store Sales Growth (%)
- Number of Stores (#)
- Store Space – Gross and Selling (sq ft)
- Average Store Size (sq ft)
- New Store Productivity
Grocery Business Model
Food retailers generate revenue from the sale of groceries and other goods, either online or offline. Retail revenue is derived from total sales growth. The total sales growth for food retailers is calculated as a sum of comparable sales growth and new stores sales growth. Comparable-store sales growth, also known as same-store sales (SSS) growth or like-for-like (LFL) growth is a key indicator for grocery retailers. It refers to the revenue generated from a grocery retailer’s outlets that have been operational for more than 12 months.
Comparable-store sales eliminate the sales impact from new store openings, closings, or acquisitions, to measure the sales growth of a grocer on a comparable basis. This makes comparable-store sales an important metric when analyzing the sales growth of a retailer. Comparable-store sales are a function of store traffic and store tickets. Store traffic is the change in the number of people visiting a store, and store ticket is the change in the spending per customer.
New or acquired store sales growth is the impact of change in the number of stores on the overall sales in a given period. It is calculated as the product of gross store space growth and new store productivity. New store productivity measures the efficiency with which a new store generates sales as a percentage of the efficiency of a pre-existing or same-store. New store productivity of 100% would indicate that the performance of a new store is on par with that of a pre-existing or same-store.
For food retailers, like all other retailers, retail revenue is equivalent to total revenue. Total revenue can be broken down either by distribution channels such as store-based and e-commerce or by modes of operations such as retail and wholesale. Store-based revenue and e-commerce revenue together form total retail revenue. For food retailers with wholesale operations, total revenue is the sum of retail revenue and wholesale & other revenue.
Available Comp Tables - Consensus Estimates
Visible Alpha offers 6 food retailer-related and 9 hypermarkets & supercenters-related comp tables, comparing forecasts for key financial and operating metrics, to make it easy to quickly conduct relative analysis, whether you are interested in looking at key values for grocers globally, in the Americas, or Europe. Every pre-built, customizable comp table is based on region, sub-industry, or key operating metrics.
Global Financial and Operating KPIs Company Examples:
FOOD RETAILERS
- THE KROGER CO. (KR)
- Albertsons Companies Inc (ACI_US)
- Woolworths Group Ltd (WOW_AU)
- X5 Retail Group NV (PJP_DE)
- Magnit PJSC (MGNT_RU)
HYPERMARKETS & SUPERCENTERS
- Walmart Inc. (WMT)
- Costco Wholesale Corporation (COST)
- TARGET CORP (TGT)
- BJ’s Wholesale Club Holdings Inc (BJ_US)
- Alimentation Couche-Tard Inc. (ATD_CA)
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This guide highlights the key performance indicators for the grocery industry and where investors should look to find an investment edge, including:
- Grocery Industry Business Model & Diagram
- Key Grocery Metrics PLUS Visible Alpha’s Standardized Industry Metrics
- Available Comp Tables
- Industry KPI Terms & Definitions