ShopRite was once again the big winner among all food and drug retailers in the $93.1 billion Food Trade News region, according to data published in our 36th annual retail market study.
While it was a challenging year for most merchants, independently-owned ShopRite stores with help from its corporately-owned sister operation, PriceRite, continued its recent string of successes and gained share with strong identical store sales and 10 additional stores that opened during the past 12 months.
ShopRite and its parent firm, Wakefern Food Corp., expanded its lead in the two largest markets in the Northeast – Metro New York and the DelawareValley – and this year’s survey revealed it has nearly doubled the share of its next closest rival, Stop & Shop (13.84 percent vs. 7.69 percent).
The Food Trade News market study covers a 70-county area ranging from Litchfield County and New Haven counties in Connecticut to Franklin County, PA and as far south as New Castle County, DE (see coverage map on page 8). The measuring period of the study was from April 1, 2013 through March 31, 2014.
Once again, most retailers in the region found business difficult as tremendous overstoring, a still unsettled economy (especially for those in the lower middle and lower economic strata) and expanded shopping options continued to gridlock progress. Last November, when food stamps (SNAP benefits) were reduced by 11 percent, sales were also impacted.
Despite the ultra-competitive environment, there were some winners. Besides, ShopRite/PriceRite, Wegmans, Whole Foods, Trader Joe’s, Aldi and Costco  moved the sales needle forward. Companies like Fairway Market, despite poor earnings results which collapsed its stock price, and Acme Markets, which for the past decade has lost market share each year, also noticeably improved sales performance. Among the battle of New York City urban merchants, Key Food fared well.
As for annual losers, a couple of once iconic retailers, the “not so” Great Atlantic & Pacific Tea Company and Kmart, once again headed that dubious list. Both organizations continued to close stores and hemorrhage sales and share. Other retailers whose regional sales (compared to last year) trended downward included Stop & Shop, Rite Aid, Weis Markets and the independent retailers who trade under the ShurFine/ShurSave banners supplied by AWI.
Of the top 10 retailers, ShopRite/Price Rite increased its lead this year by adding more than $750 million in sales and opening 10 net new stores. Overall volume in the 70-county region was estimated at $12.81 billion with 239 stores, including 227 ShopRite units. The Keasbey, NJ-based firm has at least another half-dozen new stores in the pipeline including the first member owned PriceRites in Garfield, NJ (Inserra) and Camden, NJ (Ravitz), both which should open in the next 120 days.
After several years of positive progress, Stop & Shop hit a sales barrier this year, similar to other operating divisions of Ahold USA. The global retailer’s Purchase, NY-based division operated three fewer stores this year (193) and saw sales drop approximately $15 million as competition in all retail channels impacted the conventional supermarket merchant. For the 12 months ended March 31, Stop & Shop’s sales were $7.15 billion.
While Stop & Shop had a year full of competitive challenges, A&P had another train derailment. The Tea Company operated 19 fewer stores in its core Metro New York-Philadelphia region and saw not only overall volume plummet, ID sales also continued their downward pattern of recent years. During the past 12 months, CEO Sam Martin departed and was replaced by Tea Company chairman Greg Mays on an interim basis. In March, the Montvale, NJ chain promoted former COO Paul Hertz to the chief executive post and also elevated two other existing executives. More than a few trade observers feel the time is close at hand when A&P (Pathmark, Waldbaum’s, Food Basics, Food Emporium, and Super Fresh) will have to sell or close a significant block of stores or consider filing Chapter 11 again. For the year, A&P sales are estimated at $5.72 billion for its 262 stores in the region, down from $6.21 billion a year ago.
Giant/Carlisle, while facing some of the same challenges of other Ahold USA stores, did perform the best of all the chain’s divisions. It remained particularly strong in its core Central PA market and also gained share in the Philadelphia market. During the past 12 months, the Carlisle-based regional chain replaced its long-time president Rick Herring with industry veteran and Central PA native Tom Lenkevich. Sales for the year were $5.27 billion up from $5.14 billion. Giant/Carlisle operated 146 stores in the region, four more than a year ago. Ironically, if the retailer operated stores in New Jersey and Delaware, its Philadelphia and DelawareValley market shares would have even been stronger.
Wal-Mart, which despite maintaining its very impressive per store averages, had its flattest year in the past 15. The world’s largest merchant only opened one net new store this year in Levittown, NY, its first Neighborhood Market in the 70-county region. Three other stores were converted to SuperCenters – Kennett Square, PA; Selinsgrove, PA and Kearny, NJ. Sales at its 167 units in the region produced estimated extrapolated sales (food and drug) of $4.74 billion up from $4.70 billion last year.
The two largest drug chains in the country – Walgreens and CVS – are virtually running neck and neck with each other. Walgreens, which enjoys a better sales store sales average, was aided by its strong presence in the five boroughs of New York City (particularly in Manhattan where it operates primarily under the Duane Reade banner. In fact, 317 of its 752 units can be found in Manhattan, the Bronx, Brooklyn, Queens and Staten Island. With an increasing number of food products on its shelves, Walgreens estimated annual sales are $4.55 billion. It opened 11 net new stores during the past year.
CVS ranked seventh among all food and drug retailers in this year’s market study. The Woonsocket, RI based drug chain now operates 957 units in the region, 23 more than last year and rang up estimated sales of $4.51 billion. Like its chief rival, Walgreens, CVS has been ramping up its grocery selection in the past few years.
Ranking eight and rounding out the drug chain triumvirate was Rite Aid, which had its best ID sales year in more than a decade, but lost ground due to store closures (it operated 25 fewer stores than the year before). Estimated sales for the Camp Hill-PA firm were $3.61 billion.
Costco once again paced all club operators in the 70-county marketing territory. Ringing up some incredibly high volumes in and around the City of New York, the low-margin club merchant only opened one new store this year (N. Plainfield, NJ), but has new stores slated for Riverhead, NY; N. Brunswick, NJ; Yorktown, NY; Lawrence, NJ; and Cherry Hill, NJ later this year. The internationally growing Issaquah, WA retailer now operates 42 stores in the marketplace, which amassed estimated extrapolated sales of $3.41 billion, up from $3.3 billion last year.
Rounding out the top 10 was Costco’s biggest competitor in the Northeast, BJ’s Wholesale Club. The Natick, MA based club retailer operated the same number of units as 2013 – 66 – and achieved estimated extrapolated sales of $2.57 billion, up marginally from last year. New stores are scheduled to open soon in Bellport, NY (SuffolkCounty); in the Bensonhurst section of Brooklyn and in The Bronx (Riverdale).
Other retailers that surpassed the billion dollar sales mark in the region include: Wawa (sales of $2.62 billion at its 487 convenience stores excluding gas); Target (extrapolated estimated volume of $2.41 billion at its 125 units); Acme Markets (103 stores, which amassed estimated sales of $2.89 billion); independent marketing and advertising group C-Town, whose estimated annual sales were $2.04 billion at its 209 locations; Weis Markets (annual revenue of $1.77 billion at its 112 stores); Whole Foods (39 stores with estimated sales of $1.479 billion); Key Food (whose independent retailers operated 150 stores and garnered $1.475 billion in sales); Associated Food Stores (the New York City-based group of independent retailers, who produced an estimated $1.40 billion at its 173 stores); 7-Eleven (785 c-store units producing an estimated $1.15 billion in annual volume); Wegmans (20 megastores whose collective estimated annual sales were $1.12 billion); and Met Food, another group of primarily urban independents who operated 111 stores and produced estimated annual revenue of $1.01 billion.
Sales leaders by class of trade were: supermarkets – ShopRite/PriceRite (239 stores – estimated annual sales of $12.8 billion); drug chains – Walgreens/Duane Reade (752 stores – estimated sales of $4.55 billion); convenience stores – Wawa (487 stores – annual sales of $2.56 billion); mass merchandisers – Wal-Mart/Neighborhood Market (167 stores – extrapolated estimated sales of $4.74 billion); club stores – Costco (42 stores – extrapolated estimated sales of $3.41 billion). Moreover, the region’s eight military commissaries rang up $110.9 million in annual sales.
Taken as a group, the 90 multi-store retailers in the survey operated 8,423 stores with sales of $91.6 billion, which represented 98.43 percent of the grocery, HBC, general merchandise, pharmacy, tobacco, beer & wine and floral products in the Food Trade News marketing area.
