Jockeying Grocery Store Chains

May 13, 2014 | Retail
By Joshua Woodbury

Jockeying Grocery Store Chains

Retail
By Joshua Woodbury
Jockeying Grocery Store Chains

Still enthused after admiring the race won by California Chrome at this past weekend’s Kentucky Derby, I’m drawn to a similarly competitive arena in the grocery store market. Western Real Estate Business just published an article, “Consolidation Of The Grocer Nation” by Nellie Day, addressing a changing dynamic in the way grocers are positioning themselves. In Woodbury’s commercial real estate business, my experience leads me to agree with the premise that market disruption is the result of retailers acknowledging and adapting to consumers’ varying preferences for grocery shopping experiences. Consumers can buy bulk at Costco or Sam’s Club, find health-conscious product at Whole Foods or Sprouts, go for ethnic foods with Hispanic and Asian grocers, find City Target or Walmart Neighborhood Market in urban settings, go to traditional neighborhood markets like Albertson’s and Safeway, or spend thrifty at dollar stores.

"In Woodbury’s commercial real estate business, my experience leads me to agree with the premise that market disruption is the result of retailers acknowledging and adapting to consumers’ varying preferences for grocery shopping experiences."

The segment with the most disruption is the traditional middle-market neighborhood grocers, where the nation’s largest grocer’s – Kroger, Albertson’s, and Safeway – are aiming to compete with the Walmart’s and Whole Foods, offering new large and small concepts, and purchasing smaller, regional grocery chains. I’m hearing these large grocery chains strategize to position small format stores in urban locations, and then reposition two or three suburban stores into one larger format store. Thus, we will continue to see more shopping choices for consumers while the biggest chains are consolidating and pulling back on overall space.