Top 100 Grocery Retailers – Episode 3

Episode 3 of 10: Navigating the Grocery Retail Value Drivers

Analysing the levers of growth, profitability, and efficiency

Grocery retailers make money by optimizing three primary value drivers: sales growth, gross to net margin management, and efficiency. FY24 proved a more challenging year financially for these drivers compared to FY23.

The Growth Headwind

Aggregate revenue growth for the top 100 in USD terms slowed significantly to 1.3% in FY24, down from 5.7% the previous year. While constant-currency growth averaged a more healthy 4.8%, the declining growth trajectory created underlying profitability headwinds for the sector. North American retailers, representing nearly half of the total revenues, saw growth slow to 3.4% from 4.2% in FY23, evidencing globalized growth headwinds.

Profitability vs. Efficiency

Margin Resilience: Despite growth challenges, average operating margins (3.6%) and net margins (2.2%) improved slightly year-on-year. Operating margins increased by 12 basis points and net margins by 15 basis points, demonstrating some minor positive profit translation down through grocery retailer P&Ls in FY24.

Efficiency Dilution: Efficiency, defined as sales productivity from assets, is a critical value driver in grocery retail P&Ls but showed an average reduction of approximately 5% in FY24. The falling sales growth levels significantly contributed to this dilution.

Protecting Returns: Because efficiency fell, it was the modest improvement in net margins that protected overall returns, keeping ROA stable at 3.9%.

Outlook for 2026

Retailers are mindful of an ongoing challenging environment for real-terms revenue growth. To accelerate returns, there will be an intensified focus on improving efficiency and enhancing gross to net profit margin translation higher up the P&L, specifically through revenue management levers and increased private label penetration.

Given the outlook, CPG commercial teams will need to be ever more commercially agile in order to identify and unlock value driving opportunities with their grocery retail customers.

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This series is a curated version of our full report which covers wider analysis and reporting supported by more extensive graphics and tables than this headline episode format allows. It also includes a ranked table of the top 100 global grocery retailers. Look out on our Resources page for future releases and where you can also get in touch with us to learn more.

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Episode 4 — Regional Revenue Profiles

We move from global drivers to geographic realities, starting with a regional and country level breakdown of global grocery power.

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