Dive Brief:

• The 25,380 Midwestern grocery stores reaching $2 million in annual sales in 2016 have dropped 6% from 2015, representing a loss of 1,522 stores in a single year, Inmar Willard Bishop Analytics, a market-research firm says, according to the Wall Street Journal.
• Store numbers are expected to drop to nearly 19,000 by 2021. Bankers involved in food-retail sales say that falling sales are leading to acquisition opportunities for big grocers and wholesalers.
• S&P Global Market Intelligence discovered that food-retailer default increased by 30% after Amazon's announcement regarding the purchase of Whole Foods Market.

Dive Insight:

Numerous factors are contributing to grocery insolvencies, including online shopping and bulk purchasing from such sources as Costco or Sam's Club. Smaller discounters, such as Aldi, are also stealing away customers from traditional groceries. 

In fact, even some home delivery networks are having trouble keeping staff. This is due to the "gig economy" terms in place when such workers likely started in the delivery field; filling out their days with as many part-time jobs as possible in order to earn something close to what a full time job would pay. Now that jobs are becoming available again, such gig workers are departing for more stable waters.

Traditional groceries may be likened to other brick and mortar retailers currently struggling against e-commerce giants. The convenience of ordering online, or in some cases, ordering online at a grocery discounter like Walmart, is a tough amenity to beat.

Unfortunately for traditional grocers, other grocery sources — like Costco and Aldi — have worked out efficient and effective distribution networks while keeping prices down, so if the traditional grocers can't find a way to streamline their own distribution networks and supply chains, they will continue to struggle with high prices and a smaller profit margin.