SIC 5141 Groceries, General Line

SIC 5141

This category covers establishments primarily engaged in the wholesale distribution of general lines of groceries. Specialty establishments—those involved in such activities as roasting coffee, blending tea, or grinding and packaging spices—are not included in this classification. Wholesalers responsible for the distribution of specific grocery classes are classified under specific wholesale distribution areas such as SIC 5142: Packaged Frozen Foods; SIC 5143: Dairy Products, Except Dried or Canned; and SIC 5145: Confectionery.

NAICS CODE(S)

422410

General Line Grocery Wholesalers

INDUSTRY SNAPSHOT

Wholesale food distributors provide food and related products (health and beauty aids, cleaning products, and other general grocery items) to retail grocery stores, convenience stores, and other retailers that sell food products. Food distributors can provide other services to their retail customers as well—advertising, merchandising, accounting, real estate site location, and financing. Their infrastructure usually includes warehouse facilities, truck fleets, and related information technology systems.

A factor contributing to the decline of the food wholesaler was the trend toward self-distribution. Grocery chains are increasingly moving in this direction, causing wholesalers to expand their client base in order to take on more (and often smaller) independent grocers. With the number of independents shrinking annually, this pool was becoming limited, forcing some wholesalers to look to mergers as their only way of surviving. Even industry giants Supervalu and C & S Wholesale exchanged and consolidated certain assets in 2003. That year, the industry employed 678,450 workers, with an average annual salary of $35,110.

ORGANIZATION AND STRUCTURE

To be profitable, wholesale distribution must operate on a local or regional level. The most successful distributors, therefore, have either located their warehouse near a targeted metropolitan area or have set up a system of branch warehouses to limit the distance their truck fleets must travel to deliver goods to retailers.

As of 2003, there was a variety of wholesale distributors in the United States. The specialty wholesaler provides a limited range of products—gourmet foods, spices, candy, or greeting cards. These wholesalers usually provide a range of services that include point-of-sale merchandising material, display suggestions, and product servicing such as stock rotation and monitoring of product displays. Rack jobbers provide a limited line of products—usually health and beauty aids, house wares, toys, and other types of non-food merchandise with distinctive marketing requirements different from those needed for food items—for which they assume complete responsibility on the in-store level.

Full-service wholesalers offer complete lines of grocery and non-grocery products; they also often provide lines of general merchandise, dairy, bakery, frozen foods, fresh meat, and fresh produce. Besides the food products themselves, full-service wholesalers provide help to the retailer in advertising, merchandising, and procuring products they may not warehouse. For example, a wholesaler may not actually stock fresh meat in its own...