Since the United States Department of Agriculture (USDA) established national standards for organic production and processing in 2002, the US consumer demand for organically produced goods has continued to have a positive upward trend. According to the USDA, organic and natural products are available in 3 out of 4 conventional grocery stores and accounts for over 4% of total US food sales. Consumers who prefer organically produced foods are very health-conscious and concerned about the environment, animal welfare and they show a willingness to pay price premiums established by the marketplace. It is expected that by 2020, the organic and natural market will be worth $64.6 billion (“Organic Market Overview”, 2017). Recently however, the grocery industry is showing strong signs of market saturation since new store growth is outweighing demand and grocers are cutting prices to compete. Supermarkets have been expanding rapidly across the US in recent years. Compared to last year, total US grocery sales fell with almost 2 percent in the 12-week period ending July 2016 (Nielsen, 2017). According to the Business Insider the US food retail market is highly fragmented (see graph 4.1) and US grocery store profits are driven down in a business that is …show more content…
Latest data has shown that food accounts for less than 1% of total online sales in the US and that US consumers shopping online for groceries went up from 5.7% in 2014 to 7.7% in 2016. The convenience of online shopping and grocery delivery will become a bigger part of overall grocery shopping. Furthermore, through the use of smart technology and robots that help improve inventory management and customer experience, supermarkets are starting to save in operating costs and which marks the start of new investments made by companies like Kroger and