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Scanning grocery store productivity statistics

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Image of a a man in a blue shirt holding a brown paper bag of groceries. A delivery van is seen in the background.
September 2024
Scanning grocery store productivity statistics

Neil Chakraborti

Since we delivered our Beyond the Numbers story on productivity in grocery stores, the entire economy was upended by the COVID-19 pandemic. In the aftermath of the pandemic, the services offered by grocery stores greatly expanded to include curbside pickup, online ordering, self-checkouts, and more. What better time to make a trip back to the grocery store to see how productivity has changed given these developments? It's definitely worth checking out! 

Record high employment in 2023

The number of workers employed at grocery stores grew an average of 0.3 percent annually from 2000 to 2023. While technological innovations and two recessions brought employment down in grocery stores from 2000 to 2010, increases in the years since led to record employment at just above 2.6 million in 2023.

Average weekly hours hits record low in 2023

Despite increasing employment, decreasing average weekly hours moderated the growth of total hours worked in grocery stores. Average weekly hours peaked at 34.5 in 2003 when employees worked 4.2 billion total hours. Since then, average weekly hours fell in over half the years, leaving total hours worked at or below 4.0 billion in all but one year, 2020. In 2023, average weekly hours dipped to a new low of 28.5 with total hours worked at 3.9 billion.

Productivity in grocery stores up in 7 of the last 8 years

Productivity growth in grocery stores hit a historic high of 6.0 percent in 2016. Since then, productivity has risen every year except 2022, when it fell at the fastest rate since the economic downturn in 2008. Productivity in grocery stores has generally grown within each business cycle since 2000.

Output and hours declined in 2022 and 2023, but output remains above pre-pandemic level

Labor productivity is measured by output per hour. Since 2000, output has generally grown faster than hours worked, and this trend accelerated in 2016. Output declined in 2022 and 2023, but remained above its pre-pandemic level. Hours worked were mostly flat from 2016 to 2019, rose 4.0 percent in 2020, and have since returned to their pre-pandemic level.

Productivity–compensation gap widens in retail trade

Technological innovations in the broader retail trade industry, in which grocery stores are the largest employer, have led to an ever-widening gap between growing productivity and stagnant compensation. When labor productivity grows faster than real hourly labor compensation, this is often referred to as the productivity–compensation gap. During the pandemic, the gap widened further in retail trade.

Productivity–compensation gap in grocery stores slow to emerge

In grocery stores, a productivity–compensation gap emerged in 2005. The gap narrowed in 2008 and 2009 but expanded again through 2014 as compensation fell while productivity remained flat. Productivity growth has outpaced compensation gains since then, though real hourly compensation in grocery stores reached a new high in 2020, a year earlier than the peak for retail trade.

Labor compensation for grocery stores, as a percentage of output, remains above retail sector

Labor cost-cutting measures in retail trade brought compensation as a percent of output down by 3.1 percentage points from 2000 through 2023. After reaching a peak of 14.4 percent in 2003, the compensation share fell for grocery stores as well. Grocery chains built bigger locations to accommodate a more diverse inventory, in-store services were replaced by more prepackaged products, and consumers experienced a more self-service environment. These mostly capital-intensive changes continued to reduce compensation's share of output for grocery stores.

Margin productivity lags official labor productivity measure

Standard retail productivity measures are based on how efficiently the industry sells products to consumers. Margin productivity isolates the efficiency of the services retailers provide apart from the products. As standard labor productivity remained flat for grocery stores from 2011 through 2015, margin productivity declined. Both measures followed similar growth patterns in the years since.

Unpacking what we've gathered

More information

The data presented in this article reflect trends in the supermarket and other grocery (except convenience) stores industry which refers to the 6-digit North American Industry Classification System (NAICS) code 445110. This industry comprises establishments primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry. Included in this industry are delicatessen-type establishments primarily engaged in retailing a general line of food. Supermarkets accounted for 95.7 percent of sales for 2023 in the larger Grocery Stores industry (NAICS 4451) on which the margin productivity comparison is made.

Neil Chakraborti is an economist in the Office of Productivity and Technology, U.S. Bureau of Labor Statistics. For questions about this Spotlight, please email chakraborti.neil@bls.gov or productivity@bls.gov.

Data presented in this Spotlight on Statistics are from the Bureau of Labor Statistics annual release of trade productivity data and experimental margin measures of retail output and labor productivity. Downloadable data tables are available for the standard and experimental measures.

Articles explaining the impact of declining average weekly hours on productivity and understanding the labor productivity and compensation gap provide additional context.