Aldi, Sprouts lead the way as grocery stores continue to navigate a challenging economy

Grocery stores faced the same challenge that all retailers faced in 2023: Customers struggling with economic uncertainty and persistent inflation were likely to spend less money, even on groceries.

Grocers also faced — and will continue to face — increasing competition from restaurants and will continue to deal with rising food prices in 2024.

Despite these challenges? The grocery business notched yet another strong year in 2023, according to JLL‘s 2024 Grocery Report.

The reason for this success? JLL credits the willingness of grocers to adapt. As JLL reports, grocers continue to expand their budget-cost private-label brand offerings. Others are boosting their online delivery services and curbside pick-up offerings. The most successful grocers undersand the needs of their customers and strive to meet them.

As JLL says, it’s about personal connections: Those grocers who will stay relevant and remain competitive will be those that establish personal connections with their consumers and continue to innovate in response to changing consumer preferences.

Here’s an interesting stat, though: Consumer spending at grocery stores rose 2.6% in 2023 when compared to 2022. But during this same time, consumer spending on dining out rose a much higher 11.7%.

As JLL says, grocery store spending outpaced dining out spending in March of 2020, when the country first locked down in response to the COVID-19 pandemic. But as the economy slowly began to reopen, consumers returned to dining outt. Dining out spending at restaurants and bars would surpass grocery spending starting again in March of 2021.

Which grocery stores are growing quickly? Aldi leads the pack. JLL reported that Aldi opened more new stores than any other grocer in 2023, opening 109 new U.S. locations. Publix came in second with 38 new locations, while Sprouts opened 30 and Grocery Outlet 29.

Aldi’s new stores last year totaled nearly 2.5 million square feet of new space, a 32.3% increase from 2022, according to JLL’s research.

Publix with its new additions added about 1.9 million square feet of grocery space in 2023.

Sprouts had a particularly good year in 2023. JLL reports Sprouts 30 store openings in 2023 was an 87.5% increase from 2022. Sprouts last year opened its 400th store, this one in Haddon Township, New Jersey. Sprouts plans to expand its number of stores by 10% year-over-year as part of its five-year expansion plan.