The global food and grocery retail market is expected to grow from USD 12.8 trillion in 2025 to USD 17.7 trillion by 2035, reflecting a CAGR of 3.3%. The food and grocery retail market is growing rapidly due to several important factors. Increasing urbanization is a major driver as more people move to cities, which boosts demand for organized retail formats like supermarkets and hypermarkets.
| Attributes | Description |
|---|---|
| Estimated Global Industry Size (2025E) | USD 12.8 Trillion |
| Projected Global Industry Value (2035F) | USD 17.7 Trillion |
| Value-based CAGR (2025 to 2035) | 3.3% |
These stores offer greater convenience and a wide variety of products, making shopping easier and more efficient. Rising disposable incomes also enable consumers to spend more on quality food and grocery items, further fueling market growth.
Technological advancements have significantly transformed the retail landscape. The rise of e-commerce platforms allows consumers to shop for groceries online, providing convenience and a larger product selection. Retailers are using data analytics and artificial intelligence to personalize shopping experiences, manage inventory better, and improve supply chains. These innovations enhance customer satisfaction and support the expansion of the market.
On the basis of product type, the fresh food segment captures 38% share. Based on sales channel, the supermarket segment holds 63% share. The Indian food and grocery retail market is slated to grow at 4.2% CAGR during the study period. Consumer preferences are shifting toward healthier and more sustainable food options.
There is growing demand for organic, locally sourced, and ethically produced products. Retailers are expanding their offerings to include more health-conscious and environmentally friendly options to attract a diverse customer base. Additionally, the COVID-19 pandemic accelerated changes in shopping habits as more people opted for home dining and online grocery shopping, increasing sales in the food and grocery retail sector.
The food and grocery retail market is segmented by product type into fresh food, frozen food, food cupboard, beverages, cleaning & household, and others. By distribution channel, the market includes supermarkets & hypermarkets, convenience stores, departmental stores, and online retail. Regionally, the market is divided into North America, Latin America, Western Europe, Eastern Europe, Balkans & Baltic, Russia & Belarus, Central Asia, East Asia, South Asia & Pacific, and Middle East & Africa.
By product type, the fresh food segment captures 38% share. Based on sales channel, the supermarket segment holds 63% share. Fresh food is widely sold through retail because consumers prefer to buy fresh produce, meat, dairy, and bakery items directly from stores where they can see, touch, and choose the best quality products. Retail outlets like supermarkets and grocery stores offer convenience by providing a one-stop shop for fresh food alongside other groceries.
These stores also maintain proper storage conditions such as refrigeration and display techniques that help preserve freshness and extend shelf life. Additionally, retailers often source fresh food locally, which appeals to customers seeking freshness and supporting local farmers. Competitive pricing and regular promotions in retail stores further encourage consumers to purchase fresh food through this channel.
The supermarket segment accounts for 63% share. Supermarkets are widely preferred because they offer a convenient and comprehensive shopping experience all under one roof. Customers can find a wide variety of products including fresh food, packaged goods, household items, and personal care products, which saves time and effort.
Supermarkets typically provide competitive pricing, regular discounts, and loyalty programs that attract budget-conscious shoppers. They also maintain high standards of hygiene, product quality, and customer service, which build trust and satisfaction. Additionally, many supermarkets are located in easily accessible areas and offer extended hours, making shopping flexible and convenient for consumers.
Consumers are increasingly demanding eco-friendly products and sustainable practices from retailers
People nowadays are considerably aware of the environment. The growing consciousness of the environmental effect of traditional consumption patterns is the driving force behind the request for eco-friendly products and sustainable practices from the retail sector. The consumer behavior is modified with the help of various mechanisms, among which is the availability of accurate information, knowledge about the changing climate, and the need to improve conditions for present and future generations.
Environmentalists and eco-conscious consumers go out of their way to locate products made from natural resources, having less packaging, and are obtained in ways that are friendly to the Earth. For instance, there is a large increase in demand for products made from recycled or biodegradable materials, in addition to those that have a lower carbon footprint.
This goes beyond the products to the whole supply chain. Consumers do not only want to buy products that are eco-friendly, but they also want to be sure that the brands are sustainable sourcing, ethical labor practices, and responsible manufacturing.
One of the ways through which retailers can satisfy customer desires is by adopting several sustainable ways of operating. A lot of them are not using single-use plastics, recycling programs, and sourcing locally to lessen transportation emissions. In addition, some retailers are funding the purchase of renewable energy for their operations and improving the energy efficiency of their stores. With these actions, they not only fulfill consumer wants but also take part in such a larger look as environmental sustainability.
Self-checkout and autonomous payment systems are becoming more common in stores.
Self-service and autonomous payment systems have turned into a norm in retail outlets, radically altering the shopping conditions for consumers and retailers. The above-mentioned systems enable clients to independently scan, bag, and pay for their products without any help from a cashier. The transition to self-service technology has been forced by multiple reasons, including the pursuit of convenience, efficiency, and cost savings.
For the customers, self-checkout is the faster and more convenient way of purchasing their goods. Browsers do not have to stand shuffler long to get groceries thus they have a power of controlling the checkout process. Furthermore, self-checkout systems are user-friendly and intuitive, this is why they doubtless find it easy to go through the payment process. Now that mobile payment options have been included, such as digital wallets and contactless payments, the checkout experience has become even more seamless and efficient.
Apart from that, retailers also enjoy the advantages of using the self-checkout and autonomous payment systems. First, these systems are a good way of cutting down on labor costs since they only employ a small number of cashiers. This gives retailers a chance to redistribute their staff to other relevant tasks like refacing or providing assistance to the consumers in the store. In addition, self-checkout systems can positively impact the visit of a customer to the store by speeding up the process and getting rid of the delays that happen when the store is busy. Consequently, the buyers will be happier and possibly, come back.
Automation, robotics, and smart technology are revolutionizing supply chains and store operations.
The opening of a completely new highly efficient, error-free, and cost-effective age for management of supply chains and retail operations through the use of automation, robotics, and smart technology is possible through the latter's capability to efficiently restructure and assign tasks at supply chains and retail establishments. These technologies are deployed in various retail sectors, starting from the inventory management system to the customer service sector, which in turn increases the efficiency and trustworthiness of both supply chains and in-store operations.
Incorporation of automation in supply chains comes with many advantages among which the direct one is the efficiency of streamlining kinetic and optimize operation. Automated systems are able to carry out repetitious jobs like sorting, packing, and labeling with a higher accuracy rate and a quicker speed, which frees up manual labor and also helps in minimizing errors.
With faster throughputs of tasks, it becomes possible for employees to do more productive and value-add interventions. The different yield from this is seen in the case of automated warehouses for instance, they utilize robotics and conveyor systems to move and arrange goods effectively, in this way they are sure that the delivery is on time and also they virtually eliminate stock-out issues.
Robotic applications have become an essential part of sustaining the accuracy and efficiency of supply chain operations. Companies that utilize automated guided vehicles (AGVs) and autonomous mobile robots (AMRs) for transporting goods among different warehouses and distribution centers have consequently reduced the effort and time required for manual handling processes.
The robots are fitted with highly sophisticated sensors and artificial intelligence to operate in complex environmentsevade obstacles and optimize their own routes. Moreover, robotic arms are used for operations that involve picking and packing items which in turn makes it possible to maintain a consistent quality of product and packing.
Tier 1: 1 consists of the dominating global market companies such as Walmart, Costco Wholesale Corp., and Amazon.com Inc., which are practically equal to industrial giants. Walmart is a mothership of the retail industry boasting more than 10,500 stores around the globe and maximizing its potential with a remarkably wide product array and seamless supply chain operations.
Costco is a true membership model trendsetter that builds loyalty among its clients through the bulk purchasing option while maintaining the competitiveness of prices and Amazon is the one who has always provided proper solutions by utilizing state-of-the-art logistics and a data-driven approach to meet the needs of a wide range of customers. Holding substantial proportions of market share, these companies are the main reason for the high market concentration tier.
Tier 2: Hidden in the deep darkness of the night are regional and national players like The Kroger Co., Target Brands, Inc., and ALDI. they have strongholds in specific regions. Kroger is a focus on private-label goods and the company is based similar to a loyalty program for the consumers, Target acted like a magnet for people with diverse lifestyles and preferences, by the means of having products that one would like as well as good location of stores, ALDI is again an operator, who demonstrates the products through the suppliers and low prices come through efficient operations and a limited assortment strategy. Although these companies may not be worldwide successful as the Tier 1 ones, they do attain to standing market share in their regions, contributing to moderate market concentration.
Tier 3: Tier 3 represents firms mostly consisting of local retailers that often operate as sole proprietors and offer services to specific cities or towns. These include companies such as small grocery chains, family-owned stores, and specialty food retailers that love to provide personal care, the products which are not available in other places, and the sense of belonging to the community. Even if they do not have the influence, nor the scale of Tier 1 and Tier 2 companies, they provide a variety of items that customers can buy while helping to create loyalty to their stores in the long run and this is the retail ecosystem they build. The market is concentrated in this tier, which is relatively low, because of numerous small players, as a result, the market is fragmented.
From 2025 to 2035, the food and grocery retail market is expected to grow at different paces across countries. India leads with a projected CAGR of 4.2%, driven by rapid urbanization, expansion of organized retail, and rising disposable incomes. The USA is forecasted to grow at a moderate CAGR of 2.7%, supported by stable demand and increasing e-commerce penetration.
Germany shows the slowest growth among the three, with a CAGR of 2.2%, reflecting a mature and highly consolidated market. Overall, India’s growth rate significantly outpaces both the USA and Germany, highlighting its strong market potential and ongoing transformation in retail infrastructure.
| Countries | CAGR 2025 to 2035 |
|---|---|
| USA | 2.7% |
| Germany | 2.2% |
| India | 4.2% |
A notable movement toward health and wellness is evident among customers in the USA, and this is the primary reason for the increase in the demand for organic and natural items. With a greater sense of awareness, people have come to know the health hazards related to the use of processed and artificial ingredients and now they have the need to look for the food that is free from synthetic chemicals, pesticides, and GMOs.
Information on nutrition and wellness is readily available, and there is also a high-profile campaign of organic lifestyles by celebrities and influencers which strongly encourage this trend. Consequently, retailers react by expanding their portfolios of organic and natural products, and even regular supermarkets devote more space for these goods. The outcome is the accumulation of a market for organic fruits, dairy, meats, and packaged foods that are rapidly growing and depicting a broader view of the society placed on health and sustainability.
Germany experiences the popularization of sustainability and local sourcing products, which is propelled by the strong will of the population to conserve the environment and the desire to support local economies. Customers are increasingly shifting towards products that have a less environmental footprint, like less packaging, lower carbon footprints, and more sustainable production practices.
Especially, local sourcing is given importance as it not only helps with the reduction of transportation emissions but also helps with the support of local farmers and producers. This movement is powered by the acceleration of climate change knowledge and a cultural norm of ecological responsibility. Thus, retailers are adapting to this change by launching a bigger range of organic, fair-trade, and local products making it easier for the customers to choose products that are good for the environment aware of the society.
The need for ready and packed foods vitiated in Indian markets in recent times as a result of a lot of reasons such as the change in lifestyle and the rise in the economy. Urbanization has brought a swift change in the cities and people have become busier than ever before which has given them little time to cook traditional meals. The rise in dual-income families and small family units has made the demand for easy-to-cook and ready-to-cook meals stronger.
As well, the relevant increase in the earning of the consumers and middle-class family’s expansion the provision of carrying out different kinds of packaged foods was perceived by more consumers. The advent of supermarkets, hypermarkets, and online shopping platforms has made available these products easily and is more attractive. Thus, today the Indian market for packed and processed foods is thriving with the ability to meet the changing preferences and desires of a complex and lively populace.
The food and grocery retail market is highly consolidated, dominated by a few global and regional giants. Walmart and Amazon.com Inc. lead with vast product assortments and strong e-commerce presence. Costco Wholesale Corp., The Kroger Co., and Target Brands offer extensive physical retail footprints combined with growing online platforms.
International players like ALDI, Carrefour, Schwarz Gruppe, and AEON Co Ltd reinforce regional dominance through cost-effective and localized strategies. Meanwhile, 7-ELEVEN caters to convenience-focused consumers with its extensive network of stores. This market concentration among major retailers results in intense competition, significant economies of scale, and high entry barriers for smaller players, maintaining a consolidated landscape globally.
By Product type the industry has been categorised into Fresh Food, Frozen Food, Food Cupboard, Beverages, Cleaning & Household, Others
By Distribution Channel the industry has been categorised into Supermarkets & Hypermarkets, Convenience Stores, Departmental Stores, Online
Industry analysis has been carried out in key countries of North America, Latin America, Europe, East Asia, South Asia and Middle East & Africa
The market is expected to grow at a CAGR of 3.3% throughout the forecast period.
By 2035, the sales value is expected to be worth USD 17.7 Trillion.
North America region region is expected to dominate the global consumption.
BASF SE, Divi’s Laboratories Ltd., Cyanotech Corporation, DSM N.V
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