New market share data from Numerator shows Costco gaining ground on traditional supermarkets as shoppers divide their grocery spending among competing formats.
Costco has overtaken Kroger to become the nation’s second-largest grocery retailer by share of consumer spending, according to new research from Numerator. It’s only the latest in a chain of signals that prove warehouse clubs and mass merchants are taking a bigger slice of the traditional supermarket business.
The findings, released October 28, show Costco capturing 8.4% of U.S. food and beverage spending during the 12 months ended September 30, 2026, up from 7.9% a year earlier. Kroger’s share slipped from 8.4% to 8.2%.
Walmart is unquestionably the dominant grocery retailer, with a 20.3% share, up from 20.1% a year earlier. Albertsons slipped from 4.6% to 4.5%, while Publix held steady at 4.1%.
The figures measure consumer spending on food and beverages, excluding alcohol and cannabis beverages, rather than total company revenue.
Price Is Only Part of Costco’s Edge
Costco’s success isn’t surprising; its business model combines limited assortments, high merchandise turnover, bulk purchasing and competitive prices. Its Kirkland Signature private-label brand gives members another reason to shop there, often delivering national-brand quality at lower prices to devoted fans of the brand.
The annual membership fee also encourages repeat visits, as shoppers look to get their money’s worth.
That said, Costco isn’t exactly replacing conventional supermarkets. Many households still rely on Kroger, Albertsons and other grocers for fresh foods, smaller quantities and everyday necessities. But they’re undeniably directing more of their spending toward warehouse clubs.
Thus it seems supermarkets can retain customers and maintain shopping frequency while steadily losing a larger share of their grocery dollars.
Kroger Is Fighting Back
Kroger isn’t standing still. Under CEO Greg Foran, the company has outlined plans to invest approximately $5 billion in customer value – including lower prices – while targeting $4 billion in annualized cost savings and roughly 3% comps growth by 2029.
The company also plans to open approximately 110 stores and eliminate about 3,000 corporate positions over three years.
Conventional grocers will no doubt need to compete on price against Walmart and Costco while maintaining the broad assortments, fresh departments, convenient locations and services that distinguish traditional supermarkets.
The Shifting Sands of Competition
The Numerator findings reinforce an overwhelming shift in grocery spending: Walmart and Costco gain share, while Kroger and Albertsons lose ground. Again, Costco’s rise doesn’t mean conventional supermarkets are going away, but they’re competing for a shrinking share of the grocery dollar.
For supermarkets, lower prices are part of the answer. Fresh-food quality, convenience, service and strong private brands are important competitive advantages – particularly for shoppers who don’t need or want warehouse-sized quantities.
There are many possible strategies, but they should all be focused on one goal: keeping more of the grocery spend.