If this year’s market study data is an indicator, then survival is the new prosperity. Despite an overall healthy economy and slightly increased inflation, many food retailers once again struggled to post positive identical store sales in the $48.5 billion Mid-Atlantic marketing area that remains overstored and diversified.

While the region clearly has too many stores which are operated by retailers with divergent styles, there is some evidence that a slight thinning out is occurring.

During the past 12 months, UNFI/Supervalu retail unit Farm Fresh disappeared, having sold 10 stores to Harris Teeter, eight to HT parent firm Kroger and three others to Food Lion. UNFI/Supervalu’s other retail entity in the region, Shoppers Food & Pharmacy, is the midst of undergoing a very sloppy sale/closing process. During the past year, it has sold or closed seven stores and the remaining 44 units are currently in play. Shoppers also recently closed the 30 pharmacies that were part of most of their stores.

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We’ve also seen shrinkage from some independents in the markets with Darrenkamp’s closing three of its stores and selling its other unit to Giant/Martin’s. That unit of Ahold/Delhaize also acquired five of the 21 Shop ‘n Save units from UNFI and in the past month acquired another Central PA independent – single store operator Ferguson & Hassler, based in Quarryville, PA.

Other operators in our survey that closed multiple stores in the area included market leader Giant Food, Safeway, Rite Aid, Kmart and The Fresh Market.

And there was certainly growth among some merchants this year, none greater than Aldi, which not only increased its store count (by 18, to 110 discount units), but also posted the best same store gains of any retailer in the Mid-Atlantic. Other retailers that increased their store counts significantly over the past year were Publix, Lidl and c-store operators Wawa, Sheetz and Royal Farms.

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So, while the region’s 5,083 stores represented a slightly downward trend from 2018, the shrinkage hasn’t been substantial enough to provide relief for many traditional supermarket operators who are also facing increased competition from growing online-driven entities such as amazon.com, walmart.com., chewy.com and FreshDirect.

In major news events of the past 12 months, the UNFI acquisition of Supervalu was arguably the biggest story of the year. In nearly eight months of ownership, the Providence, RI wholesaler has fared poorly, beset by distribution issues, an inability to sell its corporate stores, heavy debt and a shrinking stock price which has dipped to $9.90 per share (as of June 20). When UNFI announced that it had successfully beaten out C&S Wholesale Grocers to acquire Supervalu last July its share price stood at $45.73. Also, the company posted a $425 million loss in its most recent 3rd quarter.

Other retail-related news stories in the Mid-Atlantic that occurred over the past year include: the closing/selling of more than 100 Rite Aid stores (some of which were acquired by Walgreens); the successful IPO of BJ’s wholesale Club (by its private equity owners Leonard Green and CVC Capital); the bankruptcy of Sears Holdings (and continued closing of its beleaguered Kmart brand); and the sale of Turkey Hill Minit Markets convenience stores to British oil c-store operator EG Group by Kroger (which sold its entire portfolio of 784 convenience stores for $2.15 billion).

Our annual retail market survey measures sales for the 12-month period ended March 31, 2019 and covers an 89-county territory that ranges from Central Pennsylvania to Southeastern Virginia including the key marketing areas Baltimore-Washington, Harrisburg-York-Lancaster and Richmond-Norfolk.

Here’s an analysis of the top 10 retailers in the Mid-Atlantic market.

Since the inception of this market study in 1978, Giant Food has outpaced all retailers in the region and this year was no exception. The Landover, MD based “brand” of Ahold Delhaize USA (ADUSA) continued its dominant position in the Baltimore-Washington market despite operating five fewer stores than last year (161 vs. 156). However, the 83-year old merchant produced its best comp sales numbers in more than a decade, and if it weren’t for the sales decline in pharmacy (a factor for virtually all retailers nationally), Giant’s sales would have even been stronger. For the 12 months ended March 31, 2019, Giant amassed $5.17 billion in revenue.

Walmart’s results over the past 12 months were among the best of all operators in the Mid-Atlantic. However, unlike previous years, the world’s largest retailer did not accomplish its gains primarily through new stores. As it deploys more of  its capital towards digital initiatives, the Bentonville Behemoth operated the same number of stores as last year – 163 – but saw its solid comp store sales improvement come from better execution at store level, successful integration of its buy online pickup in store (BOPIS) program and its tenacity to protect its low price image. Extrapolated food and drug sales in the region are estimated at $4.85 billion.

CVS, the largest drug chain in the Mid-Atlantic, retained its third-place ranking in the market, despite a relatively flat year sales-wise. The Woonsocket, RI merchant operated six more stores (630) than last year and amassed estimated annual sales of $3.09 billion

For the first time in nearly a decade Food Lion (another ADUSA “brand”) increased its store count in the Mid-Atlantic. That gain came from the acquisition of three former Farm Fresh stores in the Hampton Roads area. And thanks to its “Easy, Fresh and Affordable” store remodeling program, the Salisbury, NC-based supermarket chain was able to produce positive comp store gains despite operating in some of the most competitive markets in the region. Estimated volume of Food Lion’s 256 stores was $2.84 billion.

Now under the leadership of veteran Albertsons executive Tom Lofland, Safeway rebounded nicely this year after several disappointing years that saw the Lanham, MD-based Eastern division run through several division presidents. Although it operated two fewer stores this year (112 vs. 114), comps were solid and the second largest player in the B-W market utilized its strong market locations and an aggressive promotional effort to gain back some business. Sales for Safeway-Eastern were $2.42 billion.

Giant/Martin’s once again ranked sixth among all retailers in the Mid-Atlantic region. The ADUSA “brand” had an excellent year of growth under its youthful president Nick Bertram.

Same store sales increased and the company added two new units in Lancaster, PA, the toughest and most changeable market in the entire Mid-Atlantic. With 54 stores in the study (most are located in Central PA with a handful in Maryland and Virginia), revenue increased from $2.14 billion to $2.18 billion.

Ranking seventh overall, but first amongst convenience store operators, was 7-Eleven. The c-store giant continued on its path of modest comp-store improvement, while upgrading many of its stores. Estimated sales for the Irving, TX-based retailer’s 1,125 stores in the Mid-Atlantic were $2.04 billion.

Harris Teeter continued to increase sales over the past 12 months. However, unlike most of its recent growth which came organically, this year’s gains came primarily from its acquisition of 10 former Farm Fresh units in Hampton Roads. The Matthews, NC-based division of Kroger operated 78 stores in the Mid-Atlantic which produced estimated sales of $2.04 billion.

Moving into the top 10 in the region for the first time was Wegmans, which continued to produce the highest average per stores sales of all retailers in the market. With one more store – in Chantilly, VA – than last year, the Rochester, NY-based uber merchant operated 21 stores in the market good for estimated sales of $1.64 billion. In late April (after this study’s measuring period ended) Wegmans opened another Mid-Atlantic store in Virginia Beach (which will be counted in the next year’s survey data). Later this year Wegmans will open the first of six new units in the Raleigh-Durham-Chapel Hill corridor of North Carolina and a Brooklyn, NY unit, its first store in the City of New York.

The region’s “International Markets” (specialty and ethnic supermarkets that are at least 20,000 square feet in size), continued to add stores in the Mid-Atlantic and are becoming an increasingly competitive factor, particularly in Baltimore and Washington. All told, there were 124 stores that fit that description, seven more than last year. Together they combined to amass an estimated $1.63 billion in sales over the past 12 months, an increase of nearly $100 million from last year.

Other retailers that topped the $1 billion mark in annual sales in the Mid-Atlantic region included: Weis Markets with 105 stores that had estimated sales of $1.54 billion; Costco – 30 stores, estimated extrapolated annual sales of $1.52 billion; Shoppers – 44 stores, estimated annual revenue of $1.21 billion; Target – 104 stores, estimated extrapolated annual volume of  $1.49 billion; Walgreens, the highest average sales per store drug retailer – 225 units, $1.16 billion in estimated annual sales; Kroger, which operated 38 stores in the region (including eight combo Marketplace units) – it added eight former Farmer Fresh stores to its fold this year – and garnered estimated annual sales of $1.15 billion; Rite Aid, which sold (to Walgreens) or closed 48 units in the region, now operates 325 drug stores in the market which produced estimated annual sales of $1.08 billion; and Whole Foods, whose 29 natural and organic stores (two more than last year), amassed estimated annual revenue of $1.02 billion.

By class of trade, the leaders are: supermarkets – Giant/Landover (156 stores, $5.17 billion in sales); clubs – Costco (30 stores, $1.52 billion in extrapolated sales); mass – Walmart (163 stores, $4.85 billion in extrapolated sales); drug – CVS (630 stores and $3.09 billion in estimated sales); and convenience stores – 7-Eleven (1,125 stores and an estimated $2.04  billion in revenue). Additionally, the 20 military commissaries rang up annual sales of $644.1 million (vs. $666.9 last year), continuing a decline of military commissary sales that’s occurred over the past nine years.

Viewed as a group, the 49 corporate chains in the market operated 5,083 stores and accrued $47.19 billion in annual sales, good for 97.30 percent of the Mid-Atlantic region’s $48.49 billion food and drug market.

Among all independent retailers (those operating between two and 19 stores), Baltimore-based B. Green led the pack with 11 stores (including a new Green Valley unit in Timonium, MD) which amassed sales of $194 million. Karns Prime & Fancy Foods, Mechanicsburg, PA, was the only other independent to break the $100 million sales barrier. Other key Mid-Atlantic independents included Graul’s, Kennie’s, McKay’s, Eddie’s of Roland Park, Lauer’s and Geresbeck’s as well as new entries to the survey this year, Streets Market, Sharp Shopper Grocery Outlet and Roots Market.

As a collective group, the 14 multi-store independent retail organizations in the Mid-Atlantic operated 60 supermarkets which garnered estimated annual sales of $659.3 million. Collectively, those stores controlled 1.35 percent of the region’s food and drug revenue.