US grocery consumers formerly used value retailers mostly for the monthly stock-up trip. Now, our research¹ indicates, many use them for routine weekly shopping. Value retailers (including mass merchandisers, warehouses, and value chains) accounted for 23 percent of total grocery sales in 2002, up from 9 percent in 1995.

This shift to value won’t end when the economy picks up. Value stores are raising their standards for convenience, the in-store experience, and assortments to match or outclass their traditional competitors—even on fresh foods. Meanwhile, many consumers, trained by value retailers to expect good quality at low prices, no longer accept the traditional grocers’ premium.

Distance is the biggest factor preventing more people from shopping more frequently at value retailers, but these stores are rapidly proliferating thanks to the strength of their operating economics: supercenters, for example, have more than doubled their return on invested capital over the course of the past ten years and now outperform traditional grocers.