Grocery retail is a very large sales business, but reported profit margins vary widely by company format and business mix. U.S. grocery-store sales reached $858.3 billion in 2022, while major retailers reported operating-income margins ranging from 4.4% at Walmart overall to 11.12% in Costco’s gross-margin measure before operating expenses. The figures below keep fiscal periods, definitions, and geographies explicit.
Contents
- U.S. grocery sales scale
- Kroger sales and profitability
- Walmart’s grocery scale and margins
- Costco’s low-margin warehouse model
- Target and Albertsons grocery-related results
- Labor and the food dollar
U.S. grocery sales scale
The Census Bureau estimated U.S. grocery-store sales under NAICS 4451 at $858.3 billion in 2022, up 8.2% from $793.4 billion in 2021. Across the broader NAICS 44–45 retail sector, sales totaled $7,041.0 billion in 2022, up 8.0% from $6,519.8 billion in 2021. These are national sales estimates, not profit figures. (U.S. Census Bureau, “U.S. Retail Sales Reach $7,040 Billion”)
The same 2022 Census survey covered 16,500 employer businesses selling directly to consumers in the 50 states and District of Columbia. Grocery-store sales were reported separately under NAICS 4451; gasoline-station sales totaled $736.1 billion in 2022. That classification distinction matters when comparing grocery figures with broader retail totals. (U.S. Census Bureau, “U.S. Retail Sales Reach $7,040 Billion”)
Walmart illustrates how much grocery volume can sit inside a diversified retailer. Walmart U.S. grocery sales were $276.003 billion in fiscal 2025, compared with $264.210 billion in fiscal 2024. The fiscal 2025 grocery figure represented about 59.7% of Walmart’s $462.415 billion in U.S. net sales. Sam’s Club U.S. grocery sales added $59.976 billion in fiscal 2025, up from $56.455 billion in fiscal 2024. (Walmart Inc., Form 10-K for the fiscal year ended January 31, 2025)
| Retail measure | Earlier period | Later period | Period change or share |
|---|---|---|---|
| U.S. grocery-store sales | $793.4B in 2021 | $858.3B in 2022 | +8.2% |
| Walmart U.S. grocery sales | $264.210B in fiscal 2024 | $276.003B in fiscal 2025 | Later figure |
| Sam’s Club U.S. grocery sales | $56.455B in fiscal 2024 | $59.976B in fiscal 2025 | Later figure |
| Walmart U.S. eCommerce sales | $65.4B in fiscal 2024 | approx. $79.3B in fiscal 2025 | Later figure |
Walmart’s U.S. eCommerce sales were approximately $79.3 billion in fiscal 2025, up from $65.4 billion in fiscal 2024. The eCommerce measure is a Walmart U.S. channel figure rather than a grocery-only measure, so it should not be treated as online grocery profit. (Walmart Inc., Form 10-K for the fiscal year ended January 31, 2025)
Kroger sales and profitability
Kroger reported $147.123 billion of sales in fiscal 2024, the year ended February 1, 2025, down 1.9% from $150.039 billion in fiscal 2023, the year ended February 3, 2024. A comparable view excluding fuel and the extra week shows sales of $132.150 billion in fiscal 2024, up 0.9% from $130.988 billion. Kroger’s identical sales excluding fuel increased 1.5% in fiscal 2024. (The Kroger Co., Form 10-K for the fiscal year ended February 1, 2025)
Kroger reported $3.849 billion of operating profit in fiscal 2024, up 24.3% from $3.096 billion in fiscal 2023. Its adjusted FIFO operating profit was $4.674 billion in fiscal 2024, compared with $4.799 billion in fiscal 2023 excluding the extra week. Those are different measures, so the reported operating-profit and adjusted FIFO figures should not be combined.
Net earnings attributable to Kroger were $2.665 billion in fiscal 2024, up 23.2% from $2.164 billion in fiscal 2023. Adjusted net earnings attributable to the company were $3.246 billion in fiscal 2024, down 2.7% from $3.335 billion in fiscal 2023 when the extra week is excluded. This contrast shows why period adjustments and the chosen earnings definition affect the apparent direction of profitability. (The Kroger Co., Form 10-K for the fiscal year ended February 1, 2025)
Kroger’s gross margin rate was 22.3% in fiscal 2024, compared with 21.9% in fiscal 2023. Gross margin is not the same as net margin: it is measured before the full set of operating expenses, interest, taxes, and other items. Kroger paid $883 million in dividends during fiscal 2024, up 10.9% from $796 million in fiscal 2023. (The Kroger Co., Form 10-K for the fiscal year ended February 1, 2025)
Walmart’s grocery scale and margins
Walmart’s consolidated net sales were $674.538 billion in fiscal 2025, up 5.0% from $642.637 billion in fiscal 2024. Consolidated gross profit was $162.785 billion, compared with $152.495 billion, and the consolidated gross-profit rate rose to 24.1% from 23.7%.
The company reported $139.884 billion of consolidated operating expenses in fiscal 2025, equal to 20.7% of net sales. Consolidated operating income was $29.348 billion, or 4.4% of net sales. Consolidated net income was $20.157 billion, up from $16.270 billion in fiscal 2024. These results cover Walmart’s full consolidated business, not only grocery. (Walmart Inc., Form 10-K for the fiscal year ended January 31, 2025)
For Walmart U.S., operating income was $23.882 billion in fiscal 2025, compared with $22.154 billion in fiscal 2024. U.S. operating income was 5.2% of U.S. net sales in fiscal 2025, compared with 5.0% in fiscal 2024. U.S. operating expenses were 22.6% of U.S. net sales, compared with 22.2%, while U.S. gross profit was 27.2% of U.S. net sales, compared with 26.8%.
The different Walmart percentages answer different questions. The 27.2% U.S. gross-profit rate describes the amount left after the cost of merchandise. The 5.2% operating-income margin is after operating expenses. Grocery sales are a major U.S. category, but Walmart does not report these U.S. operating-profit measures as grocery-only results. (Walmart Inc., Form 10-K for the fiscal year ended January 31, 2025)
Costco’s low-margin warehouse model
Costco’s fiscal year ended August 31, 2025, produced $269.912 billion in net sales, up 8% from $249.625 billion in fiscal 2024. Total revenue was $275.235 billion, including $5.323 billion in membership fees. Merchandise costs were $239.886 billion, compared with $222.358 billion in fiscal 2024, while gross margin was $30.026 billion, compared with $27.267 billion.
Costco’s gross-margin percentage was 11.12% in fiscal 2025, versus 10.92% in fiscal 2024. Selling, general, and administrative expenses were $24.966 billion, or 9.25% of net sales. Net income was $8.099 billion, up 10% from $7.367 billion, and diluted earnings per share were $18.21, compared with $16.56. (Costco Wholesale Corporation, Annual Report for the fiscal year ended August 31, 2025)
Costco opened 24 net new warehouses in fiscal 2025 and ended the year with 914 warehouses worldwide. Gasoline sales represented approximately 10% of total net sales, and Costco operated 747 gas stations. Because Costco reports a warehouse club with membership fees, gasoline, and many merchandise categories, its figures are useful context for low-margin retail but are not pure grocery-store statistics. (Costco Wholesale Corporation, Annual Report for the fiscal year ended August 31, 2025)
Target and Albertsons grocery-related results
Target’s fiscal 2025 ended January 31, 2026. Net sales were $104.780 billion, down 1.7% from $106.566 billion in fiscal 2024. Food and beverage sales were $24.136 billion, compared with $23.828 billion. Since Target is a broad retailer, food and beverage is a category measure rather than a grocery-store income statement.
Target’s gross-margin rate was 27.9% in fiscal 2025, down from 28.2% in fiscal 2024. SG&A expenses were $21.535 billion, equal to 20.6% of net sales. Operating income was $5.117 billion, or a 4.9% operating-income margin. Adjusted operating income was $4.775 billion, with a 4.6% adjusted operating-income margin. (Target Corporation, 2025 Form 10-K)
Target advertising revenue was $915 million in fiscal 2025, up from $649 million in fiscal 2024. That revenue line is not grocery profit, but it is part of the financial context for a retailer that combines food, general merchandise, and other businesses.
Albertsons reported $24.8808 billion in net sales and other revenue for the 16 weeks ended June 14, 2025, up from $24.2654 billion in the comparable 16 weeks ended June 15, 2024. Cost of sales was $18.1425 billion, equal to 72.9% of sales, and gross margin was $6.7383 billion, equal to 27.1% of sales. The 16-week period is not directly comparable with a full fiscal year. (Albertsons Companies, Inc., financial statements for the 16 weeks ended June 14, 2025)
Labor and the food dollar
Labor measures help explain why sales growth does not translate directly into profit. In the January 2025 BLS comparison table, average hourly earnings were $21.45 for grocery and convenience retailers in NAICS 4451, with average weekly earnings of $615.62. For supermarkets and other grocery retailers excluding convenience stores, average hourly earnings were $21.61 and average weekly earnings were $613.72. These are industry averages, not profit margins. (BLS, Table B-3b, January 2025)
Seasonally adjusted grocery and convenience retail employment was 2.8133 million in the April 2025 BLS table, versus 2.8324 million in the prior comparison column. Employment in supermarkets and other grocery retailers excluding convenience stores was 2.6109 million. The employment figures describe jobs, not total labor expense or retailer profitability. (BLS, Table B-1a, April 2025)
USDA food-dollar data provide another boundary for interpreting grocery profits. Retail trade received 14.7 cents of each dollar spent on domestically produced food in 2023, while wholesale trade received 11.4 cents. Together, wholesale and retail received 26.1 cents of the U.S. food dollar in 2023, down from 26.5 cents in 2022.
The 1993–2023 average retail share was 13.9 cents, compared with 14.7 cents in 2023. The comparable wholesale average was 10.6 cents, compared with 11.4 cents in 2023. USDA describes these as distribution margins or value-added shares, not retailer net profit. (USDA Economic Research Service, “More than one quarter of U.S. food dollar was paid to wholesale and retail trade establishments in 2023”)
Company figures in this article are reported fiscal-period measures and are not directly comparable across companies because fiscal year ends, business mixes, and definitions differ. Walmart and Target are broad retailers, so their grocery or food-and-beverage figures are category or segment measures rather than pure grocery-store results. BLS earnings are industry averages, and USDA food-dollar shares are not retailer net-profit rates. The figures presented here are historical or reported-period measures; no forecasts are included.