Costco leads in organic food sales

A recent study suggests that Coscto (NASDAQ:COSTCO) is the most likely leader in organic food sales in the United States, even out-performing specialty grocer Whole Foods (NASDAQ:WFM).

According to BMO Capital Markets, Costco is on track to sell more than $4 billion worth of organic foods this year, while Whole Foods is set to sell $3.6 billion worth of organic groceries, CNN Money reported.

For Costco the rise is significant, with projections up from the $3 billion in organic groceries it was set to sell just nine months ago. The shift toward more organic sales is a key initiative that will help the wholesale club connect with millennials, a crucial consumer group.

In the United States, Cotsco is the second largest retailer, after Walmart. Yet its membership is still skewed toward a demographic slightly older than millennials.

The organic food market has grown increasingly competitive over the past few years. Where Whole Foods once dominated the market, many food retailers have jumped in as more and more consumers choose to shop for natural and orgnic foods. Both Whole Foods and Costco have plenty of stiff competition in the organics market and stand to be usurped by several retailers, including Kroger (NYSE:KR), which is predicted to become the No. 1 seller of organic and natural foods within two years, according to a recent report by JPMorgan Chase.

U.S. shoppers are trending toward healither eating in general, which is apparent when looking at the rise in total sales for Whole Foods, up 10 percent in the latest quarter, and Sprouts, up 22 percent in 2014.

For more:
-See this CNN Money article
-See this Bloomberg article

Related stories:
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Discounter Aldi woos customers with coupons, credit cards
Karl Albrecht, Aldi co-founder and Germany's richest man, dies at 94
The infectious buzz of Trader Joe's employees

 

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