ShopRite Unstoppable; Ups Share Against S&S, A&P In $95.3B Market

It was another dominant year for ShopRite as it continued to build new stores, replace older ones and expand its PriceRite banner, including its first two member-owned discount units. Now with 253 stores (including Fresh Grocer), ShopRite rang up estimated sales of  $13.73 billion or 14.41 percent of the entire $95.3 billion Food Trade News’ marketing area. ShopRite’s increased market share is now nearly twice that of second-ranked retailer Stop & Shop.

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 April 1, 2014 through March 31, 2015. This is the 37th annual edition of the study.

For many retailers, the past 12 months showed slight but steady improvement over the sales patterns of the past five years. Retailers as a whole were helped by slight inflation and an overall improved economy (especially lower gas prices), but found market conditions as competitive as ever. Additionally, the trend of alternate channel operators gaining market share at the expense of traditional supermarket leaders continued.

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Besides ShopRite, there were other large retailers that enjoyed successful years. Those included Whole Foods, Trader Joe’s, Costco, BJ’s, Wegmans, Wawa, Aldi, CVS, Key Food and Acme Markets, which had a year of resurgence under the new Albertsons/Cerberus management.

Those operators that found the going still rough included Fairway Market, Kmart and perennial tail dragger A&P, which according to much industry speculation, may be for sale or nearing another bankruptcy filing.

Second-ranked Stop & Shop had a flat sales year. Volume dipped slightly from last year ($7.09 billion this year vs. $7.15 in 2014) from its 194 stores in the region, which represented a 7.44 percent share of the entire market.

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Still ranking third in the overall marketplace was the (once) Great Atlantic & Pacific Tea Company, which opened no new stores again (its operated 270 stores, two fewer than last year) and produced identical store sales that were the worst in the region for retailers with more than 25 stores. Estimated volume for all of the company’s banners – A&P, Pathmark, Waldbaums, Food Basics, Super Fresh and Food Emporium) were $5.78 billion.

Giant/Carlisle remained Ahold USA’s most consistent performer. And, while competitive conditions and lack of new stores growth (the retailer actually operated one fewer store this year -145 units) contributed to a relatively flat year, overall annual sales improved from $5.27 billion to $5.32 billion.

CVS’ strong year enabled it to jump from seventh to fifth place among all retailers in the market. The Woonsocket, RI-based drug chain, which just announced it is acquiring Target’s 1,660 pharmacies for $1.9 billion, now operates 1,024 stores in the region, 67 more than last year. Annual revenue is estimated at$5.01 billion.

Wal-Mart, among the elite in per average sales, had another year of minimal activity. The Bentonville Behemoth opened a new SuperCenter in East Brunswick, NJ and “Division 1” discount stores in Old Bridge, NJ and Camp Hill, PA. It also closed a “Division 1” unit in Massapequa, NY. Estimated extrapolated sales for Wal-Mart’s 169 stores in region were $.82 billion.

Walgreens (Duane Reade), the highest per volume drug-chain in the market, has a solid year with its smallest new store growth over the past decade. Buoyed by its strong Duane Reade brand in New York City, the Deerfield, IL-based merchant continued to lead all retailers in sales in Manhattan. Estimated volume for the past 12 months increased to $4.74 billion. Late last year, the company acquired Zurich-based Alliance Boots, the multi-national pharmacy and beauty care company.

Ranking eighth and rounding out the drug chain triumvirate was Rite Aid, which continued its recent run of positive ID sales. However, as part of its continued efficiency plan, the Camp Hill, PA-based drug operator operated eight fewer stores this year. Estimated annual sales for the year were $3.6 billion at its 940 stores in the region.

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 club store in the past year but managed to impressively increase its same store sales. For its 43 stores in the 70-couty region, the Issaquah, WA discount merchant had estimated extrapolated sales of $3.45 billion.

Rounding out the top was the Associated Stores Group (a unit of AUA Private Equity Partners), which grew substantially this year with the acquisition of the Met and Pioneer banners that were once part of now bankrupt White Rose’s customer base. With the addition of those urban banners, ASG was able to grow its base in the five boroughs of New York, although in the post-merger transition (partially caused by the White Rose situation), some urban independent retailers did switch their alliance to competitors Key Food, Allegiance and Krasdale. Estimated annual retail sales for the 388 retailers who are currently part of ASG were $3.26 billion.

Other retailers that surpassed the billion dollar sales mark in the region include: BJ’s Wholesale Club (the Natick, MA based club retailer operated six more units this year and posted extrapolated estimated annual revenue of $ 2.85 billion); Wawa (sales of $2.76 billion at its 495 convenience stores excluding gas); Target (extrapolated estimated volume of $2.67 billion at its 136 units); Acme Markets (99 stores, which amassed estimated sales of $2.20 billion); independent marketing and advertising group C-Town, with estimated annual sales of $2.13 billion at its 206 locations; Weis Markets (annual revenue of $1.82 billion at its 110 stores); Key Food (whose independent retailers operated 180 stores and garnered $1.65 billion in sales); Whole Foods (41 stores with estimated sales of $1.61 billion); 7-Eleven (787 c-store units producing an estimated $1.18 billion in annual volume); and Wegmans (20 megastores whose collective estimated annual sales were $1.13 billion).

Sales leaders by class of trade were: supermarkets – ShopRite/PriceRite (254 stores with estimated annual sales of $13.73 billion); drug chains – CVS (1,024 stores with estimated sales of $5.01 billion); convenience stores – Wawa (495 stores with annual sales of $2.76 billion); mass merchandisers – Wal-Mart (169 stores with extrapolated estimated sales of $4.82 billion); club stores – Costco (43 stores with extrapolated estimated sales of $3.45 billion). Moreover, the region’s seven military commissaries rang up $106.8 million in annual sales.

Taken as a group, the 85 multi-store retailers in the survey operated 8,443 stores with sales of $93.94 billion, which represented 98.58 percent of the grocery, HBC, general merchandise, pharmacy, tobacco, beer and wine and floral products in the Food Trade News marketing area.

The biggest stories of the year included Albertsons/Cerberus $9.4 billion acquisition of Safeway and the bankruptcy of wholesalers AWI and White Rose and the subsequent acquisition of those firms by C&S Wholesale Grocers, which impacted the number of Shurfine/Shursave operators that remained in the group. Separate, but related to the bankruptcy was the acquisition of the Pioneer and Met banners by AUA Equity Partners (Associated Stores Group)

The competitive pressures of the business as well as industry acquisitions created some key executive changes. Jack Murphy was named CEO of beleaguered Fairway Market and Brian Cornell became Target’s new chairman and chief executive. At Delhaize America (Hannaford and Food Lion), Kevin Holt replaced Beth Newlands Campbell as president. Additionally, Sean Crane was named interim CEO of The Fresh Market, replacing Craig Carlock. Stefano Pessina assumed the interim helm at Walgreens after veteran CEO Greg Wasson retired. Industry veteran Bob Siegel came and left in less than a year after being named president of the revamped Associated Stores Group. Knowledgeable industry veteran John Derderian is the new president of Allegiance Retail Services (Foodtown), replacing Mike Stolarz, and Bob Miller reassumed the CEO post at Albertsons/Cerberus (Acme, Safeway) after former Safeway chief executive Robert Edwards held the reins during the transition process.

Those retailers who folded their tents in the Food Trade News market during the last year included Delhaize America’s 66-unit Bottom Dollar Stores and Murry’s small retail stores.

And finally, what changes should our readers be tracking during the next 12 months? Here are a few potential changes to think about: the possible Ahold’s acquisition of Delhaize; Lidl’s real estate activity as it prepares for its 2018 U.S. debut; and the unveiling of WFM’s new “365 by Whole Foods Market” banner when it opens its first group of stores next year.