Why Supermarket Produce Growth is Getting Harder

Jessica Keller For decades, the produce department has been viewed as the cornerstone of the supermarket—driving traffic, signaling freshness, and anchoring the perimeter. Yet new data from the International Fresh Produce Association (IFPA) shows that while produce remains essential, sustained growth has become structurally harder to achieve in U.S. grocery stores. The challenge is not demand collapse, but a combination of declining productivity, rising costs, and shifting shopper behavior that is fundamentally reshaping how produce must perform.

One of the most consequential findings in the IFPA data is that produce's share of edible store sales has declined to 10%. This suggests that while consumers continue to purchase produce, they are allocating more of their food spend elsewhere in the store—or trading down within produce itself.
Jessica Keller, IFPA VP, Global Industry Relations

Why Produce Growth Is Getting Harder in U.S. Supermarkets

What IFPA Data Reveals—and What It Means for the Business

For decades, the produce department has been viewed as the cornerstone of the supermarket—driving traffic, signaling freshness, and anchoring the perimeter. Yet new data from the International Fresh Produce Association (IFPA) shows that while produce remains essential, sustained growth has become structurally harder to achieve in U.S. grocery stores. The challenge is not demand collapse, but a combination of declining productivity, rising costs, and shifting shopper behavior that is fundamentally reshaping how produce must perform.

Produce Is Growing—But Not the Way Retailers Need

According to IFPA's 2025 Produce Supermarket Benchmarks, average produce sales per store grew 3.3% year over year, marking a return to modest, pre-pandemic growth rates. On the surface, this suggests stability. But underneath, the economics tell a more troubling story.

Produce departments are now operating with significantly more space—averaging 6,505 square feet per store—yet generating far less productivity. Sales per square foot have fallen to $172, less than half of 2022 levels, signaling that space expansion is no longer translating into incremental returns. In other words, retailers are devoting more real estate to produce, but each square foot is working harder just to stand still.

This marks a critical shift: produce growth is no longer constrained by shopper interest alone, but by diminishing efficiency.

Basket Share Is Slipping, Even as Shoppers Still Buy Produce

The data indicates a more value-oriented mix, not higher prices, is driving sales. Average produce price per item sits at $2.80, tightly clustered across regions. This reinforces that pricing power is limited, and inflation is no longer a reliable growth lever for the category.

For retailers, this means produce must now fight harder for basket relevance, competing not just with center store, but with prepared foods, foodservice, and convenience options that increasingly shape how shoppers eat.

Labor and Shrink Are the Real Growth Constraints

While gross margin in produce remains stable at 39%, rising costs are eroding the department's ability to convert sales into profit. Labor now accounts for 8% of produce sales, while shrink remains elevated at 6%, leaving overall contribution flat at approximately 25% of sales.

This is a pivotal insight: produce is not losing margin at the top line—it is losing it through execution friction.

Labor availability, training, and scheduling challenges mean produce departments are often staffed reactively rather than optimally. At the same time, shrink—driven by perishability, handling complexity, and forecasting errors—continues to siphon off gains. These pressures limit retailers' willingness to invest aggressively in the category, even when sales grow.

Regional Divergence Complicates National Growth Strategies

IFPA's regional analysis shows that produce growth is no longer uniform across the U.S. High-volume regions like California and the West continue to generate the highest sales per store but show flat or declining unit trends, indicating mature demand. Future growth in these regions will depend on mix optimization, labor efficiency, and shrink control, not volume expansion.

By contrast, regions such as the Northeast, Mid South, Plains, and Great Lakes are posting stronger dollar and unit growth, driven by increased household penetration and purchase frequency. Yet even here, average prices remain tightly aligned with national norms, reinforcing that unit growth—not price—is the primary lever.

This divergence makes national produce strategies increasingly ineffective. Growth must now be locally managed, with region-specific assortments, labor models, and execution standards.

Why Produce Growth Feels Harder Than Before

Taken together, the IFPA data points to several structural reasons produce growth is struggling:

Productivity dilution from space expansion without corresponding sales gains
Declining basket share, even as shoppers continue buying produce
Limited pricing power in a value-oriented consumer environment
Rising labor and shrink costs that neutralize topline growth
Regional fragmentation that complicates scale efficiencies

Produce is no longer a category where retailers can “grow their way out” of operational challenges.

Business Implications for Retailers and the Industry

For retailers, the implications are clear and urgent:

Growth must come from execution, not expansion. Additional square footage is unlikely to improve results unless paired with productivity gains.
Labor and shrink are now strategic priorities, not operational footnotes. Small improvements here have outsized profit impact.
Assortment discipline matters more than breadth. Faster turns and relevance beat endless SKU expansion.
Regional strategies will outperform national playbooks. Local demand signals must drive decisions.
Produce must re-earn its role in the basket, not just the perimeter.

For growers, shippers, and suppliers, this means success increasingly depends on helping retailers simplify operations, reduce risk, and improve velocity, not just deliver volume.

The Bottom Line

IFPA's 2025 data makes one thing clear: produce is not broken—but the old growth model is. The department remains essential, profitable, and strategically important. However, future gains will come not from more space or higher prices, but from discipline, precision, and operational excellence. Retailers that adapt to this new reality will protect produce's role as a traffic and profit driver; those that don't will find growth increasingly elusive.

2025 Produce Supermarket Benchmarks: Detailed Data

The produce department remains a critical profit contributor, but future gains will depend on improving productivity, controlling shrink and labor, and driving stronger share-of-basket performance—not expanding space.

National Average (2025)

Average produce sales per store: $1,119,073
Growth over prior year: 3.3%
Produce sales as % of edible store sales: 10%
Average square feet: 6,505
Sales per square foot: $172
Average produce price per item: $2.80
Average spend per trip: $9.13
Gross margin: 39%
Labor % of sales: 8%
Shrink: 6%
Contribution estimate (% of sales)*: 25%

*Computed as gross margin minus labor costs minus produce shrink. Data from Circana.

Regional Performance

California

Average annual produce sales per store: $1,587,298.77
Growth over prior year: 0.8%
Average dollars per item: $3.00
Units per Store % Change: -0.3%

Great Lakes

Average annual produce sales per store: $1,003,649.47
Growth over prior year: 3.2%
Average dollars per item: $2.67
Units per Store % Change: 1.3%

Mid South

Average annual produce sales per store: $974,148.39
Growth over prior year: 5.8%
Average dollars per item: $2.79
Units per Store % Change: 4.4%

Northeast

Average annual produce sales per store: $1,196,408.32
Growth over prior year: 7.1%
Average dollars per item: $3.02
Units per Store % Change: 7.2%

Plains

Average annual produce sales per store: $966,106.25
Growth over prior year: 4.4%
Average dollars per item: $2.80
Units per Store % Change: 2.0%

South Central

Average annual produce sales per store: $740,257.75
Growth over prior year: 2.2%
Average dollars per item: $2.43
Units per Store % Change: 0.9%

Southeast

Average annual produce sales per store: $1,106,772.49
Growth over prior year: 0.6%
Average dollars per item: $2.86
Units per Store % Change: -1.1%

West

Average annual produce sales per store: $1,741,114.85
Growth over prior year: 3.9%
Average dollars per item: $2.76
Units per Store % Change: 2.8%

Methodology To help you benchmark your supermarket produce department, IFPA obtains information from Circana's point of sale data as well as sends a survey to produce buyers each year. The results are aggregated and reported to our members to help them determine the health of their supermarket produce department. In 2026, 22 supermarkets, representing over 19,000 stores responded to our survey.

Glossary

Average produce transaction: Measures the average dollar amount each shopper spends on produce per trip to the supermarket.
Gross margin %: Measures the percent of each sales dollar that is required to cover the cost of produce products sold.
Store Labor %: Measures the percentage of each sales dollar that is required to cover the cost of store labor.

Why Produce Growth Is Getting Harder in U.S. Supermarkets

Why Produce Growth Is Getting Harder in U.S. Supermarkets

What IFPA Data Reveals—and What It Means for the Business

Produce Is Growing—But Not the Way Retailers Need

Basket Share Is Slipping, Even as Shoppers Still Buy Produce

Labor and Shrink Are the Real Growth Constraints

Regional Divergence Complicates National Growth Strategies

Why Produce Growth Feels Harder Than Before

Business Implications for Retailers and the Industry

The Bottom Line

2025 Produce Supermarket Benchmarks: Detailed Data

National Average (2025)

Regional Performance

California

Great Lakes

Mid South

Northeast

Plains

South Central

Southeast

West

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