Three Shifts Driving US Grocery M&A Activity

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Key Points

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.

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:

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