A recent article in Supermarket News confirms some of the issues that we have previously written about in this blog.
The question at hand is whether or not the market for grocers is saturated?
Competition for consumers’ grocery dollars has increased due to wholesale clubs, pharmacies, and stores such as Target and Walmart. Still, the article tells us that there are still more than 38,000 grocers in the USA! “Not just stores, but grocers!”
Even with all of the very large chains that folks are familiar with, such as Publix, Albertsons, SuperValu, HEB, etc., “no single player accounts for more than 1.2% of the total share.”
What does that mean for the future?
Could be we’ll see a continuation of very tough competition, consolidation and lots of opportunities for those who excel.
The southern New Hampshire supermarket landscaping is in a period of rapid change. Shaw’s is closing 6 stores. Last week, Stop & Shop closed its 6 New Hampshire stores. Market Basket is expanding/renovating its stores.
Locally, Whole Foods is coming to town — joining Hannaford, Trader Joe’s, Target, Costco, Sam’s, BJ’s Wholesale Club and Wal-Mart. Rite-Aid, Walgreens and CVS all have multiple big stores in the area, with lots of grocery options. For a city with a population of fewer than 100,000, it seems like a crowded marketplace.
While southern New Hampshire is a shopping mecca because of its tax policies, and while the above-listed group of competitors reflects only one city, one has to wonder if there is enough business for everyone. Looking ahead 1 – 3 years, who will be the winners? The losers? And what will the winners do differently or better than the losers?
If you had a crystal ball, who would bet on?
What advice would you give these retailers?
Steve Burd, former chairman and CEO of Safeway, was quoted earlier this year as saying that he believed, “Safeway can own the wellness space.”
If so, Safeway is going to have a lot of competition aside from other supermarket retailers! To begin, there’s Wal-Mart, Target and the big box stores like Costco.
And of course there’s the pharmacy chains like Walgreens, Rite-Aid and CVS.
If you have been to one of the pharmacy chains recently, you may have seen pharmacists giving vaccines, nurse practitioners and physician’s assistants diagnosing and writing prescriptions for medications, and new healthy food choices in the aisles.
Looks like everyone wants a piece of the ‘wellness space’… and that’s a pretty large space in the marketplace… and so much of that space used to belong to supermarkets.
The market is expected to grow as the new healthcare laws begin to take effect and millions of people will have access to healthcare. Competition will continue to increase and each provider is eagerly positioning itself as the best source for products and services.
It will be interesting to see who “owns” the wellness space a year from now…!