Specialty and Value Grocery Chains Were Top Performers in Q3 2024

Specialty and value grocery chains were the top performers in the grocery industry when it came to year-over-year visit growth in Q3 2024, according to a recent white paper released by Placer.ai. While the grocery industry continues to perform well, the white paper entitled “Specialty and Value Chains Transform Grocery in 2024” said that “location analytics show shoppers are increasingly drawn to these two grocery store types, a shift that has the potential to reshape the grocery landscape.”

Some of the white paper’s highlights include the following:

• While visits to traditional grocery stores fell by 0.5% year-over-year, value and specialty chains experienced 5.0% and 5.2% increases, respectively.

• Consumers are willing to travel further to shop at specialty grocery stores.

“We believe the willingness to drive greater distances to Trader Joe’s and Sprouts largely comes down to unique products,” Placer.ai’s Head of Analytical Research R.J. Hottovy told Connect CRE. “Trader Joe’s has been a leader with respect to product innovation the past few years, introducing new products and flavors across its owned-brand portfolio, while Sprouts has built a loyal following through its organic and natural product assortment.”

Meanwhile, on the value grocery chain side, consumers shopping at ALDI and Trader Joe’s tend to spend more time in-store than visitors to traditional and specialty grocery chains. The white paper reported that 26.5% of visits to value grocery chains lasted longer than 30 minutes. This compares to time spent at traditional grocery chains (23.4% of visits lasted longer than half an hour) and specialty grocery chains (23.7% of visits lasted longer than 30 minutes).

The white paper noted that one reason is that shoppers take their time to examine price points and to find the best value for their dollars.  

“The majority of ALDI and Trader Joe’s products sold are owned brands, which can be sold at lower prices than national brands,” Hottovy explained. Additionally, chains like Grocery Outlet acquire excess inventories from the national brands. “These can then be sold at deep discounts, relative to traditional grocers,” Hottovy said.

Furthermore, some traditional grocery chains are creating or expanding their discount banners. These include:

• H-E-B’s Joe V’s Smart Shop

• Hy-Vee’s Dollar Fresh

According to Hottovy, the chances are excellent that value grocery chains will continue attracting consumers. While inflation has moderated, “consumers are still paying significantly higher food prices than they did a few years ago, suggesting that they will continue to visit value grocers in the year ahead,” he said.

As for specialty grocery chains, Hottovy doesn’t see things slowing down there, either. “They should also remain the preferred destinations for consumers in the years ahead as preferences evolve and consumers look for unique and authentic product offerings,” he said.