It won’t be easy for Bottom Dollar. The extreme value format division of Delhaize America that is coming to the Delaware and Lehigh Valleys with 21 discount stores beginning this fall will face stiff challenges from existing competition, not only within their portal (Save-A-Lot, Aldi and PriceRite), but from all channels competing in an overstored highly competitive landscape. And being the “newest kid on the block,” makes the starting post even that much more difficult.
Having visited most of the Bottom Dollar locations in the Baltimore-Washington market since Delhaize converted its suburban Maryland and northern Virginia Food Lion stores to Bottom Dollars and Blooms (Delhaize’s more upscale format) in 2006, frankly, I’ve not been all that impressed.
A revisit to several of those stores in the past three months (since it was first leaked that Bottom Dollar was coming to Pennsylvania and southern New Jersey), didn’t do much too change my mind.
Compared to the other three extreme value merchants, who all operate stores in the areas where Bottom Dollar is entering (although not necessarily in direct competition), I found store conditions, variety and perishables to be inferior to those of the other three competitors, who are all fairly entrenched in their marketing areas. However, I did find pricing to be strong and judging by the locations that Bottom Dollar has selected, in some areas it could have an advantage in terms of combining both convenience and price.
Those locations are: 197 E. Dekalb Pike, King of Prussia, PA; 2134 Street Rd., Bensalem, PA (Bensalem Plaza); 154 Airport Rd., Coatesville, PA (Airport Village Shopping Center); 889 E. Lancaster Ave., Downingtown PA. (Ashbridge Square); 11 Bellvue Ave., Penndel, PA (Penndel Shopping Center); 1955 Davisville Rd., Willow Grove, PA; 782 Bethlehem Pike, North Wales, PA. (Montgomeryville); 2826 Dekalb Pike, East Norriton, PA (Northtowne Plaza); 219 W. Butler Ave., Chalfont, PA (Chalfont Village Shopping Center); 5200 Route 42, Turnersville, NJ (Ganttown Plaza); 230 N. Marlton Ave., Marlton, NJ (Crispin Square); Bustleton Ave. and County Line Road, Lower Southampton, PA (The Shops at Walnut Grove); 6119 N. Broad St., Philadelphia, PA; Krewstown Rd. and Welsh Rd., Philadelphia, PA (Krewstown Shopping Center); Lansdowne Ave. and Baltimore Ave., Lansdowne, PA; 7627 Lindbergh Ave., Philadelphia, PA (Penrose Park Plaza); 4270 Perkiomen Ave., Exeter Township, PA (Reading Mall); 1400 N. Charlotte St., Pottstown, PA (The Shops at Ringing Rock); 1856 Catasauqua Road, Allentown, PA (Valley Plaza Shopping Center); 3245 Hamilton Blvd, Allentown, PA (Dorneyville Shopping Center); and 919 Lehigh St., Allentown, PA.
It is expected that the Bottom Dollar units will be supplied by Delhaize’s 2 million square foot distribution center in Antrim Township, PA, near Greencastle in Franklin County
Earlier this year, Delhaize CEO Pierre-Olivier Beckers stated that his company would look to expand its Bottom Dollar brand in light of the challenging economy and its ability to find locations that fit the size and demographic of the typical extreme value customer (lower-middle and below on the demographic scale with stores in the 12,000-25,000 selling square foot range).
I don’t know what it is about Philadelphia that seems to attract new merchants and merchandising strategies.
Late last year, Target converted virtually all of its DelVal locations (33 stores) to hits hybrid “p-fresh” model and Wegmans looks at the market as truly fertile ground. Sure, Acme, A&P/Pathmark and Genuardi’s might seem like easy pickins’, but with so much diversity in retailing styles, way too many overall food options already and some tenacious and steely supermarket operators like ShopRite and Giant/Carlisle who have growing market shares to compete with, the day-to-day competitive level already resembles the NFC East.
Delhaize didn’t exactly knock it out of the park when they first entered the Keystone State with its Food Lion format in the mid-1990’s (it still operates seven stores in Southern and Central PA). It won’t take long once Bottom Dollar opens to judge their effort.