Executive Summary

From Amazon’s purchase of Whole Foods Market last year to Southeastern Grocers’ bankruptcy filing in March, we have seen a flurry of activity in the US grocery market in recent months. In this report, we discuss these corporate developments and note three trends driving mergers and acquisitions (M&As) in grocery. The sector is shifting:

• From fragmented to more consolidated: Fragmentation is a driver of incremental consolidation and there is room for sustained consolidation in US grocery.
• From offline to digitalized: The race to digitalize grocery offerings is fueling investments such as Target’s acquisition of Shipt, Albertsons’ purchase of Plated and Walmart’s acquisition of Parcel.
• From pure play to multichannel: Amazon’s acquisition of Whole Foods reflects how much more difficult it is to make pure-play Internet retailing work in the grocery category than in nonfood categories.