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Natural food stores are one of the fastest-growing retailers in the U.S. and now they have an online store with new offerings.
But the food stores have long struggled to stay relevant in an industry where grocery prices have soared.
Last year, a study by researchers at the University of California, Davis, showed that natural food stores saw a $3.9 billion decline in sales from 2011 to 2014.
“The average organic food store saw a 2.3 percent drop in sales over the same time period,” said Erin Kibbey, a UC Davis professor who co-authored the study.
That is the equivalent of a grocery store that is losing $1 billion in sales a year.
Kibbey and her colleagues found that organic food stores that offered fresh produce and organic foods from organic producers saw sales rise 7.7 percent in 2014.
They also found that grocery stores that used organic ingredients also saw a 5.5 percent increase in sales.
Organic grocery store sales are up nearly 17 percent over the last two years.
Organic grocery stores have an average organic product mix of roughly 1,500 organic ingredients, which is a fraction of the traditional grocery store mix of 1,600 to 1,900.
“That organic mix is a lot more diverse, and it’s a lot easier to find organic ingredients,” Kibbow said.
“They can get away with having different brands, and organic products are more affordable.”
The biggest challenge for organic food brands is the sheer size of their markets, said Sarah Gee, a professor of food policy and policy analysis at the UConn School of Public Health.
Organic stores have a large presence in some of the country’s most densely populated areas, including in cities like Boston, New York, San Francisco, and Philadelphia.
Gee said organic grocery stores are more vulnerable to competition from the larger-scale grocery chains that also have a presence in these neighborhoods.
Gees study found that more than a quarter of organic grocery store owners and franchisees had been in business less than a year, and half had closed within the last year.
Glee also said that while the organic food industry is growing fast, many smaller, family-owned grocery stores and restaurants are struggling.
“We have seen a significant increase in consolidation,” she said.
“We have been seeing a lot of consolidation at the family-run grocery store.”
Gee, who is also a professor at the Center for Food Safety, said it’s difficult for smaller, independent grocery stores to survive without their customers.
“Some of these people have never had to pay for their groceries, and they’ve been told they’re going to lose their business if they don’t sell more organic goods,” she added.
“These are people who are really invested in their business, and there’s a certain amount of trust and confidence that they have that they’re not going to be harmed by the consolidation that’s going on.”
Gees research showed that organic stores were also more likely to have lower sales of food items than non-organic grocery stores.
The organic grocery industry is also growing fast.
According to a report by the National Retail Federation, organic grocery sales increased by more than 7 percent last year, which was the largest growth rate in organic food sales.
The grocery industry and the food retailing industry are two sides of the same coin, said Lisa Mathers, president of the National Consumers League.
“Consumers want a choice, and you have to have that choice,” she told ABC News.
“You can’t go to one place and have that same selection.
You have to go somewhere else.”