As a shopper in 2025, it may seem like you have endless choices for your routine grocery haul.
But the reality is that considerable consolidation has taken place over the past several years. While in prior decades, folks may have visited half a dozen grocery stores or markets in a given town, nowadays, the vast majority of shoppers are making trips to just a handful of locations.
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Currently, the top five largest retailers in America are:
Walmart: $534 billion U.S. salesAmazon: $250 billion U.S. salesCostco: $175 billion U.S. salesKroger: $150 billion U.S. salesHome Depot: $140 billion U.S. sales
It’s no surprise that the top four largest companies on the above list are primarily involved in grocery.
That’s not because grocery is a particularly lucrative business. In fact, grocery is a notorious loss leader for many brick-and-mortar retailers since a lot of their goods are perishable and need to be moved off shelves quickly in order to turn a profit.
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It’s actually because they’ve been around for decades, building up a robust market share and brand trust among U.S. consumers. Many have hundreds or even thousands of locations across the U.S. and are big enough to buy up competitors right when they come along and before they eat into their businesses too much.
Being in the consumer staples business is also helpful, since when shoppers slash their budgets, they’re far more likely to cut out superfluous spending — on things like streaming services or dining out — than they are on meat, eggs, toilet paper or baby formula.
Costco is a leader in grocery retail.
Image source: Ting Shen/Xinhua via Getty) (Xinhua/ via Getty Images
Top grocers have pricing power
And the fact that food has gotten more expensive isn’t necessarily a clear-cut issue for some of America’s top grocers.
Early in the pandemic, when supply chains were constrained, and certain items were hard to come by, many retailers ate the cost of price hikes. Several quarters later, when economic recovery began to look up, many chains continued to benefit from price hikes, instead passing those costs on to the customer.
Some of the largest grocers in America, however, were able to keep those costs at bay. Walmart (WMT) , the country’s number one grocer, announced in 2024 that it would reduce the cost of many items, returning prices to pre-inflation levels.
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On the other hand, Costco COST kept its membership fee price steady for years after the pandemic, attracting more customers looking for a bargain. Very few customers complained when it finally did hike its fee for the first time since 2017.
“Price of membership increases has been lower than inflation,” one Reddit user wrote after the fee hike. “Every Costco around me is filled like sardines every time I go. Costco is booming. Even if it was at $200, I’d pay for it gladly.”
Costco sales are booming
This strategy clearly works for the warehouse.
Its holiday season sales were up 9.9% year-over-year, amounting to about $27.5 billion during the five-week period from December to January 5. Same-store sales rose by 7.4%, and e-commerce sales grew by 34.4%.
It’s not just grocery that has Costco flying high, though.
“Overall, we think spending is stable as consumers are finding value in [Costco’s] offering,” D.A. Davidson analyst Michael Baker said of the bumper numbers.
“In addition, we see this as a function of strong discretionary sales, as e-commerce sales mostly come from nonfood categories, which are more weighted to discretionary areas,” he added.
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