A year ago many retailers predicted that the road ahead from a revenue perspective could be rocky as the record sales achieved because of COVID tailwinds were ebbing and seemed certain headed for a downward cycle. And then came inflation.
There were other factors, too, including a return to food hoarding (largely caused by diminished in-stock conditions) and a continuation of in-home eating that contributed to better than predicted results for most of the 74 retailers who we surveyed.
However, the primary reason for another year of healthy sales was rising prices. 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 potential onerous scenario if inflation continues to rise and supply chain flow doesn’t improve.
So, for the period from April 1, 2021 to March 31, 2022, here’s the breakdown of the top 10 retailers that operate stores in the 70-county $111.8 billion market.
For the 37th consecutive year, ShopRite and its sister banners (Price Rite, Fresh Grocer, Gourmet Garage, Dearborn Market and Fairway Market) continued to dominate the landscape in the overall marketing area. Over the past 12 months, ShopRite added to its already saturated store base by adding new stores in Wayne, NJ, Poughkeepsie, NY and Matamoras, PA (a replacement unit for a store in Montague, NJ). During the year, the Keasbey, NJ grocery co-op also experienced some key personnel changes including the departure of veteran executive Jeff Reagan and the unexpected announcement that executive VP Chris Lane had resigned. With the recent news that long-time president and COO Joe Sheridan will be retiring in October 2023, Wakefern/ShopRite has begun a search to fill Sheridan’s post. As for the numbers, ShopRite and Wakefern’s other banners operated 280 stores in the region (two more than last year) and rang up estimated sales of $16.8 billion.
Stop & Shop had a challenging year especially when compared to the COVID-related and new remodels gains it made in the previous 12 months. The largest Ahold Delhaize USA (ADUSA) brand operated two fewer supermarkets this year (209 vs. 211) and saw sales dip to $7.97 billion in the competitive New York Metro market.
Conversely, another ADUSA brand – The Giant Company – continued its positive roll that began years before COVID. The Carlisle, PA-based supermarket chain opened three new stores over the past 12 months, including new Giant stores and Heirloom Markets in Philadelphia with two more Giants and another Heirloom Market also slated to open in Philadelphia over the next 18 months. Sales at its 159 stores surpassed the $7 billion mark for the first time.
Maintaining its fourth-place slot, CVS also retained its leadership among drug chains in the market. However, like rivals Walgreens and Rite Aid, the Woonsocket, RI-based drug chain closed stores in the 70-county region. Now operating 1,239 drug stores, CVS amassed estimated sales of $6.6 billion
For the first time in almost four years, Walmart did open a new store over the past 12 months. It’s new SuperCenter in Yaphank, NY (Suffolk County) which debuted last fall and is – not surprisingly – producing big numbers. There were also a handful of stores that were upgraded, but the “Bentonville Behemoth” once again focused primarily on building its e-commerce profile which did include an expansion of its curbside pickup services and an addition of about a dozen micro-fulfillment centers. Annual extrapolated food and drug sales for its 174 stores in the region are estimated at $6.2 billion.
Like CVS, Walgreens also closed drug stores during the past year, particularly in the five boroughs of New York City. The Deerfield, IL-based division of Walgreens Boots Alliance, remained the highest per store average drug chain in the region, and now operates 741 stores in the market (27 fewer than last year) that produced estimated annual sales of $5.05 billion.
Costco enjoyed one of the finest years of any retailer in the market with double-digit comp store increases as well as gains in traffic counts and average ring. The Issaquah, WA-based club merchant now operates 50 stores in the region good for estimated annual extrapolated sales of $5.04 billion. Earlier this year, Costco promoted 56-year old Ron Vachris to president, indicating that it is lining up a potential succession plan when current CEO Craig Jelinek, 69, retires.
It was another solid year for the Mid-Atlantic division of Albertsons whose banners include Acme, Safeway, Kings and Balducci’s. While the Malvern, PA-based division operated the same number of stores as last year (179), it continued to offer its customers some of the best in-stock conditions of any retailer in the market. It was that level of execution which helped the retailer generate improved comps over a very healthy 2021. Sales grew from $4.6 billion in 2021 to $4.7 this year.
Nobody had a better year in the market than Target. The Minneapolis-based mass merchant produced double-digit same store sales gains while also opening seven new units (most of them smaller, urban formats). Now with 175 stores in all parts of the 70-county region, Target’s extrapolated annual sales are estimated to be $4.29 billion, a $568 million increase over last year. Additionally, Tar-jay has another 18 new stores planned over the next three years.
Rounding out the top 10 is the leading wholesaler serving Metro New York independent retailers (that is not a co-op), Krasdale, which continued to service the most stores in the market (533 – mostly in the five boroughs of New York City). Those stores rang up annual retail sales of $3.9 billion during the 12-month measuring period. The privately-held wholesaler supplies such NYC stalwart independent banners as AIM, Bravo, C-Town, Market Fresh, Stop1 and Shop Smart.
Other retailers that topped the $1 billion mark in annual sales in the region included BJ’s (79 stores with extrapolated annual sales of $3.7 billion); Wawa (544 stores with annual sales of $3.5 billion); Key Food (298 stores with annual sales of $3.4 billion); Rite Aid (649 stores, estimated annual sales of $2.70 billion); Whole Foods, including Amazon Fresh and Amazon Go (73 units, good for estimated annual sales of $2.72 billion); Weis Markets (110 stores, annual sales of $2.71 billion; 7-Eleven (1,032 c-stores, estimated annual volume $2.4 billion); ASG (231 stores, annual sales of $1.96 billion); Wegmans (26 stores whose estimated annual revenue was $1.94 billion); Trader Joe’s (58 stores, estimated annual volume of $1.6 billion); Aldi (169 discount units whose estimated annual sales reached $1.5 billion); Allegiance Retail Services (111 stores with annual sales of $1.25 billion) and Sam’s Club (23 stores, estimated extrapolated annual sales $1.01 billion).
By class of trade, the leaders are: supermarkets – ShopRite/Price Rite/Fresh Grocer et al (280 stores, $16.8 billion in estimated annual retail sales); clubs – Costco (50 stores, $5.04 billion in estimated extrapolated annual sales); mass – Walmart (174 stores, $6.2 billion in estimated extrapolated annual sales); drug – CVS (1,239 stores and $6.6 billion in estimated annual sales); and convenience stores – Wawa (544 stores and $3.5 billion in annual revenue).
Viewed as a group, the 74 chains and independents operating in the grocery, club, mass, drug and c-store channels operated 8,763 stores and accrued $109.6 billion in annual sales in the Food Trade News marketing region, good for 97.99 percent of the region’s $111.8 billion food and drug market.
* Click here to check out all of the this year’s market study results in the June 2022 issue of Food Trade News.