A Disaggregated View of Market Concentration in the Food Retail Industry

The U.S. food retail sector has experienced substantial change in market concentration over the last three decades. To understand how the change in concentration might impact consumers, researchers would ideally focus on geographic markets that mimic where consumers actually shop. This report investigates the changes in food retailing market concentration at the national, State, Metropolitan Statistical Area (MSA), and county levels in the United States from 1990 to 2019, using data from the National Establishment Time Series dataset. The research finds that food-retailing market concentration at the county level is much higher than estimates of concentration using national-level data. Food retailing markets in rural and small nonmetro counties are considerably more concentrated than food retailing markets in metro and large nonmetro counties. Further, the study documents a significant rise in food retailing market concentration in the United States over the last three decades, at the national level as well as the State, MSA, and county levels during the period. Finally, the study shows that when excluding the largest food retailer, the concentration in retailing at the national and State level, markets would have been lower, but at the MSA and county level, markets would have been higher for most of the period analyzed.