Grocery Industry Overview
The grocery industry is a network of manufacturers, brokers, wholesalers and retailers all working together to bring goods to consumers. Currently, the United States has over 150,000 food and beverage stores, creating a 459 billion dollar industry (FMI, 2008). This overview will aim to cover the history and current state of the grocery market, as well as analyze the strengths and weaknesses of grocery, and the effects of economic indicators. The proper analysis of these factors is critical, most especially in the current state of the American economy.
An economic indicator is a statistic about the economy. Economic indicators allow the analysis of economic performance and predictions of future performance. Economic indicators include various aspects such as Real Gross Domestic Product, unemployment, and inflation. These indicators are primarily studied in the area of macroeconomics to determine their individual effect on the economy.
Real Gross Domestic Product (GDP):
Gross Domestic Product (GDP) is the calculation of the total flow of goods and services produced over a specific period. The most common approach to measuring and understanding GDP is the expenditure method. The expenditure approach calculates GDP by adding the four types of expenditures: consumption, investment, government purchases, and net exports. Real GDP is the Gross Domestic Product adjusted for inflation. For example; the GDP for the grocery industry in 2007 is 10 billion. However, due to an increase in food prices from 2006, the real GDP could be eight billion. Real GDP can account for changes in the price level, and provide a more accurate figure.
In the United States real GDP growth has decreased from 2.8% in the second quarter of 2008 to -.5% in the third quarter. The impact on the financial health of the personal and corporate sectors is the biggest concern. High levels of personal debt are making consumers...