The food retail market comprises individual firms, such as grocery stores and supercenters, that sell food products to consumers. The concentration of these retailers’ shares of the market, as measured by the Herfindahl-Hirschman Index (HHI), increased over the last three decades at the national, state, metropolitan statistical area (MSA), and county levels in the U.S.
HHI values range from 0 to 10,000, with higher values reflecting higher levels of market concentration, fewer firms or increasing disparity between the size of the firms in the market. On average, food retail concentration is higher at the MSA level than at the national level, and concentration is even higher once the market is defined at the county level.
As the geographic market area shrinks, the market concentration in 2019 increased from 593 (national) to 1,332 (state) to 1,881 (MSA) to 3,737 (county). Trends in localized markets are likely most relevant for consumers, food-retail competitors and policymakers. — USDA Economic Research Service
