Mapping the Corporate Hold on U.S. Grocery Markets
By: Melanie Canales and Aaron Johnson on 8/7/2024
The Grocery Gap Atlas is a geospatial analysis tool designed to illuminate corporate concentration in the grocery industry, how it affects food access, and who that impacts. We use the Herfindahl-Hirschman Index to estimate market concentration. This index is used to determine market competitiveness – the closer a market is to a monopoly, the higher the market’s concentration and the lower its competition. Using this index, we assessed market concentration since 2000 across the United States and through community typologies derived from the American Communities Project. Overall, market concentration has increased dramatically since 2000, with three parent companies, Walmart, Kroger, and Albertsons steadily dominating and capturing the majority of money entering the grocery landscape.
States
By comparing market dominance across states over two decades, starting in 2000 and ending in 2023, it becomes clear that on average, a small number of corporations have captured over half of the market share in food retail. In 2000, the average state-level four-firm concentration ratio (CR4) in the grocery industry across the United States was 42.5%, with the top performing parent company netting 19.4% of the total average state market share. By 2010, the U.S. grocery industry’s CR4 increased to 58.8% average across states, a 37.64% increase in captured market share. By 2023, CR4 had increased to 67%, a 13.94% increase in captured market share. Between 2000 and 2023, the U.S. grocery industry’s CR4 increased from 42.5% to 67%, an increase of 57.64%, with nearly 70% of all money spent at grocery stores across the country going to four top parent companies per state. Of particular interest is Walmart’s market share, which rose dramatically in 2010, and since 2023, dominates six of the ten markets with the highest single company market share.
A closer look at dominated states reveals the extent of concentration by a single entity. Oklahoma’s grocery landscape is the most dominated in the country, Walmart captures 50.6% of cash flow to grocery stores in the state. Iowa closely follows Oklahoma, with a market share dominated by Hy-Vee at 50%. Walmart’s outsized grip on market share continues in Arkansas, netting 49.8% of the state’s market share. Florida’s market share is dominated by Publix at 46.4%, while Mississippi also falls prey to Walmart at 45% market share dominance. With the exception of Florida, these states are comparatively rural, with nearly half of each state’s population residing outside of urban areas. Concentration in urban areas, on the other hand, tend to be the least dominated by single companies. In New York, a state with an urban population of 87.4%, Ahold Delhaize captures the largest market share at 13.6%. California’s urban population makes up the majority of the state at 94.2%, though Albertsons Co. Inc. single-handedly dominates 18.7% of the market. While urbanity does appear to mitigate the extent of concentration, it does not eliminate it by any means. Nevada’s 94.1% urban population still allows for Walmart to claim 21.5% of the state’s market share.
Community Typologies
The American Communities Project uses a vast array of data to categorize communities into different types for analysis. Using a wide-range of factors that include income, race, ethnicity, education, and religious affiliation, the ACP identifies fifteen types of counties and has mapped these types to show political, socioeconomic, and cultural discrepancies across the country.
Using these typologies, the Grocery Gap Atlas identifies census tracts that are in the top tercile (⅓ of tracts) for poor food access and most concentrated markets, revealing communities that face the brunt of poor food supply due to monopoly conditions. These tracts are referred to as tracts of most concern. Typologies that make up the largest percentages of tracts of most concern on a national scale include Rural Middle America (11.81%), Graying America (10.63%), and Hispanic Centers (9.87%). Tracts in Aging Farmlands and Native American Lands typologies have the highest share of tracts of concern. Over half (53%) of tracts in Native American Lands counties (274 tracts) are tracts of concern, and an even greater 82% of the tracts in Aging Farmlands counties (477 tracts) are tracts of concern.
Though the ACP typologies experience different CR4 ratios, among the fifteen typologies, thirteen of them are dominated by Walmart. Also dominated by Walmart are the typologies that experience CR4 ratios over 30%. As of 2023, an estimated 31.9% of African American South’s market share is dominated by Walmart, a 145.38% change from the 13% of estimated market share claimed by Winn- Dixie in this typology in 2000. 31.8% of Native American Land’s market share is dominated by Walmart, as opposed to 8.3% owned by Basha in 2000 (a 283% increase in concentration). 36.8% of both the Urban Suburbs and the Working Class Country’s estimated market shares are dominated by Walmart. However, in 2000, Albertson’s held 8.2% of Urban Suburbs market share, while Winn-Dixie held 8.9%. 36.6% of Rural Middle America’s market share is dominated by Walmart, a 603% difference from the 5.2% held by Fleming Co. Inc. in 2000. Walmart also dominates the market share of the most concentrated typologies, claiming 36.8% of Working Class Country and Evangelical Hubs, 36.6% of LDS Enclaves, and 31.9% of African American South. These percentages represent hundreds of counties that exist within a highly concentrated grocery landscape that result in a monopoly that perpetuates poor food access.
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