Retailers in the $57 billion Mid-Atlantic retail food market followed a record sales year in the region with a surprisingly robust 12 months again as inflation helped spike revenue for the second year in a row.
A year ago, when we reported volume totals from the nearly 60 multi-store retailers in 89 counties that encompass the Food World marketing area, the impact from the COVID-19 pandemic created unprecedented sales tailwinds as consumers remained at home and in-home meal consumption soared.
And in the period from April 1, 2021-March 31, 2022, sales remained strong, but for some slightly different reasons. Sure, the continuing effects and impact of COVID remained, which caused a continuation of hoarding product that was first seen in the early months of the pandemic in the spring of 2020. However, the catalyst behind hoarding groceries this time seemed driven more by the breakdown of supply chains over the past nine months, which led to product shortages.
And then there was inflation, which really was the primary reason retailers continued to produce record or near-record sales following a year when all previous sales records were broken. Over the past 12 months, the inflation rate in the U.S. rose to about 8 percent; price hikes in the grocery sector – fueled by labor shortages (leading to increased wages), raw materials and commodity challenges and production shortfalls – drove that number to above 10 percent.
As one senior executive at a Mid-Atlantic based regional chain said: “We’re selling more stuff and making more profit with 70 percent in-store service levels than in normal times where our service levels never dipped below 95 percent.”
That retailer and many others acknowledged that trend won’t last and sets up a potentially onerous scenario if inflation continues to rise and supply chain flow doesn’t improve.
Here’s a breakdown of the top 10 retailers in the Mid-Atlantic market.
Giant Food, the market leader since Food World’s first retail market study was published in 1979, remained atop the leaderboard, amassing sales of $6.04 billion at its 160 stores, one more than last year. The Landover, MD brand of Ahold Delhaize USA (ADUSA) continued its dominance in its core Baltimore-Washington market and also invested heavily over the past 12 months in its digital platform as it prioritizes its focus on omnichannel retailing.
Continuing to make gains in both overall and comp store sales was Walmart. The planet’s largest retailer (and grocery merchant) remained in second place among all operators in the $57 billion market by once again not opening a new store (in fact, it closed a store in Owings Mills, MD). Extrapolated food and drug sales at its 160 stores increased to an estimated $5.72 billion. Like market leader Giant Food, the Bentonville, AR-based company continued to enhance its digital presence by adding micro-fulfillment centers and expanding curbside service at many of its SuperCenters.
CVS, the largest drug chain in the region, retained its third-place ranking in the market. The Woonsocket, RI-based drug merchant now operates 638 drug stores in the region (eight fewer than last year), which amassed an estimated an estimated $3.63 billion in annual sales.
Remaining in fourth place among all Mid-Atlantic merchants was Food Lion which continued to be the best performing brand in the ADUSA portfolio. The Salisbury, NC grocery chain now operates 255 stores (one more than last year) in the 89-county region and compiled estimated annual revenue of $3.29 billion.
Albertsons Mid-Atlantic division, which includes the Safeway, Acme, Kings and Balducci’s banners, maintained its momentum that was created when the division was formed in 2020. Store conditions improved and all banners enjoyed in-store service levels that were higher than the industry average. During the year, the Malvern, PA-based division added two new stores (both former Shoppers’ units) and posted sales of $3.21 billion at its 124 units.
The Giant Company, the ADUSA brand based in Carlisle, PA also performed well during the past 12 months. Sales at its 63 Giant and Martin’s stores (one more than last year) in Pennsylvania, Maryland and Virginia rose to $2.88 billion.
Harris Teeter maintained its seventh-place position in the Mid-Atlantic region. The Matthews, NC-based Kroger subsidiary rang up estimated sales of $2.40 billion at its 78 stores. Earlier this year, industry veteran Tammy DeBoer replaced the now-retired Rod Antolock as president of the regional chain.
Continuing to upgrade its stores, convenience store leader 7-Eleven continued its improved performance over the past 12 months. Operating both corporately-owned and franchised c-stores, the Dallas, TX-based operator, which is owned by Japanese juggernaut Seven & i Holdings, now operates 1,088 stores in the Mid-Atlantic which produced an estimated $2.20 billion in annual sales.
Moving up two places to ninth among Mid-Atlantic retailers was Target. The Minneapolis-based mass merchant was also one of the best performers among all retailers in the region. During the past 12 months, Target opened one new store and now operates 111 units in the market ranging from SuperTargets (more than 175,000 square feet in size) to its urban model (about 25,000 square feet). Extrapolated annual revenue is estimated at $2.05 billion, a big jump from last year’s estimated volume of $1.85 billion.
The growth of the region’s 137 “International Markets” (specialty and ethnic supermarkets that are at least 20,000 square feet in size are grouped together in this survey) has been noteworthy. During the past 12 months, six more stores opened. And as the area’s Latino and Asian populations continue to grow, we expect that the presence and stature of the “International Market” retail community to expand, too. Collectively, those stores rang up estimated annual sales of $2.04 billion.
Other retailers that topped the $1 billion mark in annual sales in the 89-county region included: Wegmans with 23 stores and an estimated annual volume of $2.0 billion (the highest per store sales average of any supermarket in the region); Weis Markets with 97 stores and annual revenue of $1.93 billion; Costco – 30 stores, estimated extrapolated annual sales of $1.90 billion (one of the best performers in the region); Walgreens – 323 stores and $1.84 billion in estimated annual sales; Whole Foods, with 34 natural and organic stores and three Amazon Fresh units that together amassed an estimated annual revenue of $1.37 billion; Kroger, which operated 38 stores in the Mid-Atlantic and garnered estimated annual sales of $1.30 billion; regional convenience store power Wawa (another stellar performer this year), whose 177 c-stores (eight more than last year) rang up annual sales of $1.23 billion; Aldi with 137 stores (nine more than last year) and estimated annual revenue of $1.13 billion; Sam’s Club, which operates 26 club units in the Mid-Atlantic region, good for an extrapolated annual value estimate of $1.07 billion; and BJ’s Wholesale Club – 29 stores with estimated extrapolated annual sales of $1.06 billion.
By class of trade, the leaders are: supermarkets – Giant Food (Landover) with 160 stores, $6.04 billion in sales; clubs – Costco with 30 stores, $1.90 billion in extrapolated sales; mass -Walmart with160 stores, $5.72 billion in extrapolated sales; drug – CVS with 638 stores and $3.63 billion in estimated sales; and convenience stores – 7-Eleven with 1,088 stores and an estimated $2.20 billion in revenue.
Additionally, the 20 military commissaries in the region rang up annual sales of $421.7 million, a huge drop from last year’s sales total of $582.9 million, continuing a declining trend of military commissary sales that has occurred over the past decade.
Viewed as a group, the 48 corporate chains in the market operated 5,113 stores and accrued $55.6 billion in annual sales, good for 97.33 percent of the Mid-Atlantic region’s $57 billion food and drug market.
Among all independent retailers (those operating between two and 17 stores), Baltimore-based B. Green once again led the pack with 11 stores that amassed annual sales of $213.9 million.
Karns Prime & Fancy Foods ranked second among all independent retailers in the region. The family-owned independent, based in Mechanicsburg, PA, now operates 10 stores, one more than last year, which rang up $184 million in sales.
Another Central PA-based retail marketing group, Family Owned Markets, which oversees eight independent supermarkets, compiled an aggregate volume of $141 million over the past 12 months. Streets Market, based in Washington, DC, added one more store (in Baltimore) over the past 12 months and amassed estimated annual revenue of $100.1 million.
Other perennial Mid-Atlantic independents on the leaderboard included: Graul’s, McKay’s, Eddie’s of Roland Park, Geresbeck’s (whose founder Carl Greeley passed away last month) and discount/closeout specialist Sharp Shopper.
As a combined group, the 11 multi-store independent retail organizations in the Mid-Atlantic operated 63 supermarkets which garnered estimated annual sales of $924.1 million. Collectively, those stores controlled 1.62 percent of the region’s food and drug revenue.
Click here to check out all of the this year’s market study results in the June 2022 issue of Food World.