As fear and concerns over the uncertain state of the economy linger, consumers continue to speak with their wallets. The delineation between traditional supermarkets and discount retailers (in all channels) has never been clearer. Except for the COVID years (2020-2023) when eating at home and inflation benefited virtually every retailer, the discounters have continued to nibble away share from the conventional supermarkets in every individual market in our 48th annual market study.
And as affordability becomes an even more visceral issue for an increasing number of consumers, traditional supermarkets (which remain the leading channel in most Mid-Atlantic marketing areas) are less in control of their own destiny than ever before.
Non-discount operators like Trader Joe’s and Wegmans continue to outperform their peers, but neither merchant has a commanding presence in any individual market that we cover. A more likely scenario throughout the region stacks discounters such as Walmart, Aldi, Lidl, Costco and BJ’s battling (and mostly winning) against the likes of Albertsons, Stop & Shop and King Kullen. The one notable exception is ShopRite/Wakefern, which continues to dominate two of the largest markets in America – Metro New York and the Delaware Valley – and strengthened itself further with strong comp store sales and the acquisition of 17-store independent Morton Williams. Other traditional supermarket operators like The Giant Company, Weis Markets and Redner’s held steady, which on my grading curve is a notable achievement.
We’re not talking about game changing market share shifts. However, every year the discounters generally continue to post the best comp store sales increases and open the most location in any given market in the $131 billion marketplace.
There are also other factors at play besides overstoring and differentiated competition. The significant reduction in SNAP benefits has created a void that many retailers can’t replace. And as I noted last year, market expansion for most supermarket retailers has been very challenging. Real estate continues to be both scarce and expensive. And with the average cost to build a 60,000 square foot supermarket today runs somewhere north of $30 million (more if you want to build near New York City) – it’s no wonder that most retailers are prioritizing remodeling their stores rather than gambling on building new units. Of the top 10 supermarkets in the Food Trade News marketing area, only ShopRite (Wakefern) and Whole Foods have at least five new stores planned over the next three years. Conversely, Aldi, Lidl, Trader Joe’s and Sprouts have between eight and 15 new stores planned for that time period.
Here’s my annual analysis of some of the largest retailers in the $131.4 billion 70-county Food Trade News marketing area.
ShopRite – From one perspective, the transition from former Wakefern president Joe Sheridan to Mike Stigers three years ago, seemed seamless as the Keasbey, NJ-based juggernaut continued to operate some of the best supermarkets in country. For more than 40 years, the strength of its member-owners has helped (primarily) ShopRite to command both the Philadelphia and Metro New York markets. That streak continues today, but there’s more behind the wall at wholesale/retail organization than ever before. Stigers has brought both vision and accessibility to Wakefern, and ingenious acquisitions such as Di Bruno Bros., and most recently Morton Williams, has created more opportunities for the co-op. Di Bruno’s has now become a national specialty brand with distribution to retailers in other markets. Morton Williams gave the company a stronger foothold in New York City (mainly Manhattan), one of the few areas in the entire FTN marketing area, where the company’s presence was fairly sparse. Meanwhile the members continue to expand and improve their stores. Saker ShopRite, Wakefern’s largest member, opened a new replacement store in Manahawkin, NJ; David Zallie replaced his old store in Clementon, NJ to a bigger and more modern former Kmart unit less than a mile away; Sunrise ShopRite replaced their store in tony West Caldwell, NJ and Village cut the ribbon on a new replacement supermarket in Watchung, NJ. Additionally, the Mannix family opened a new store on Staten Island (their fourth on SI); and the Inserra Family opened a Fresh Grocer small format store in Brooklyn. Corporately, Wakefern opened a new Price Rite in (not so toney) Waterbury, CT. There were also some membership shifts to report. The Miller and Colligas family sold their Delaware Valley area stores to existing member McMenamin (Hatfield, PA) and SRS, Wakefern’s corporately-owned ShopRite store division, which acquired stores in West Chester, PA and two others in Philadelphia. Of the 70 stores measured in our annual market study, nobody had a better year than ShopRite/Wakefern.
Stop & Shop (New York Metro Div.) – It was a year of stability for the large Ahold Delhaize USA (ADUSA) brand. I’d consider that progress, when compared to last year when Stoppie closed 32 supermarkets (23 in the FTN market). President Roger Wheeler has done a good job of simplifying things and prioritizing sales improvement. And ADUSA has finally opened its wallet a bit and gave the Quincy, MA-based brand a little more firepower in which to better compete (particularly in pricing and merchandising). Still, there’s much more work to be done because the competition is fierce and Stop & Shop has yielded so much ground over a 20-year period that potential recovery will take several more years to measure. In my view, the second-largest ADUSA brand could close another 30 stores and be better off for it. What makes things even more challenging is that the two most powerful competitors in each of the regional chain’s primary operating areas – ShopRite (in Metro NY) and Market Basket (in Greater Boston) – have feasted on Stoppie for years with little pushback. Now that things have stabilized, is Stop & Shop capable of pushing back?
The Giant Company – TGC experienced the same competitive roadblocks that most other traditional supermarket operators faced – protecting market share from discounters Walmart, Aldi and few other small box discount or specialty merchants in an economically challenging environment. Over the past year, TGC opened a new store in Jenkintown, PA and a replacement unit for its supermarket in Salisbury Township, PA. On June 19 (after our market study measuring period ended), it also cut the ribbon on a new store in the Andorra Shopping Center in Philadelphia that was a former Acme Market. TGC’s dominance in Central PA and the Lehigh Valley remains uninterrupted, and even though its entry into “Center City” Philly over the past five years has been slightly disappointing, the regional chain continues to be among the overall retailers in the entire Mid-Atlantic region
Albertsons Mid-Atlantic (Acme/Kings/Balducci’s/Safeway) – Primary banner Acme’s greatest strength remains its many excellent locations particularly in the Philadelphia, Delaware and the Jersey Shore. But that’s no longer enough to hold serve. Ever since Albertsons acquired the company in 2015, it seems like the company’s supermarkets seem to be stuck in some sort of time vacuum. The stores are aging (with limited cap-ex devoted to major remodelings), its everyday pricing remains the highest of any chain in the market and it has not opened a new store in several years. However, there is something new happening at the executive level: Susan Morris was promoted to CEO (replacing the retired Vivek Sankaran). One of her first moves was to shift former Mid-Atlantic president Tom Lofland to a similar post at Jewel-Osco in Chicago and name newcomer Sean Thompson to pilot the Mid-Atlantic region. Thompson inherited a full-plate – virtually every retailer has cut into Albertsons’ market share in recent years and if the company’ believes that its heavy reliance on digital marketing and advertising is a game changer, I’d have someone proofread those notes. Morris knows the fundamentals of retail success very well – however, the hurdles she faces in trying to change the perception of a stale enterprise base might be too difficult to overcome. Thompson, who has limited supermarket experience, also has a lot to absorb. Of course, if Albertsons wins its multi-million dollar lawsuit against Kroger, things could change rapidly.
Walmart – It’s been quite a productive 12 months for the world’s largest retailer. The progress that that “Bentonville Behemoth” made was achieved without opening one new store in the Mid-Atlantic. At the corporate level, veteran company executive John Furner was named CEO replacing the legendary Doug McMillon who retired. Furthermore, for the first time in its history large nearly 10-year investment finally paid off and its e-commerce business became profitable. From a sales growth perspective, Walmart made significant gains nationally on strong comp store revenue, which was also reflected at its 173 Mid-Atlantic stores. McMillon’s prescient words still hold true: “Price leadership drives our business.” That quality rings especially true in challenging economic times which also helps to explain the big chain’s continuing success. With 77 stores in the region slated for remodeling in the next 12 months, Walmart won’t have to open any new stores to remain dominant and grow its market share.
Weis Markets – Most of Weis’ progress over the past 12 months occurred in Maryland and Delaware where the Sunbury, PA-based regional chain opened five new stores. Weis new supermarket model is handsome, progressive and efficient and most of those stores are posting strong volumes. In its “backyard” markets – Northeast PA, Central PA and the Lehigh Valley – Weis is stuck in the mushy middle like many of its traditional supermarket rivals. Those markets all are overstored and offer flat or slightly negative population growth with alternate channel operators continuing to gain share at the expense of their more conventional competitors. Weis knows its strengths and weaknesses and by shifting its growth strategy to suburban Maryland (a new store is coming to Clarksburg, MD) and Delaware (a new supermarket is coming to Millsboro, DE), the company is poised to continue its 15-year run of measured and steady progress.
Wawa – Overall, a solid year for the dynamic c-store chain, but not so much in its own backyard. Wawa actually closed five stores in the Delaware Valley and concentrated on expanding to other markets in several new states. Locally, its focus to add stores in Central and Northeast PA where it now competes another top-flight convenience store stalwart, Sheetz has met with mixed success. But it’s still early in the game and thus far the Wawa, PA-based merchant has opened on 24 of a planned 40-store expansion including five new units this year. Over the past couple of years, the foodservice-driven merchant has entered Alabama, Georgia, Indiana, Kentucky, North Carolina, Ohio, Tennessee and West Virginia. In what CEO Chris Gheysens called the “most aggressive growth” period in company history, Wawa is planning to have 2,000 c-stores open by 2030 (it now operates about 1,220 units). Wow!
Wegmans – One of the better comp store performances against all channels and particularly strong when measured against other supermarkets. But then again, Wegmans is hardly an ordinary supermarket. During the past year, the Rochester-based retailer opened two new stores – in Lower Makefield Township, PA and in Norwalk, CT (its first unit in the Nutmeg State) where it is duking it out with another retail heavyweight Stew Leonard. As I previously noted, a hidden part of Wegmans’ success is its site planning and demographics research. While all economic strata have been impacted by the uncertain economic conditions, the company’s great (and very, very expensive) store locations – in addition to size, selection, overall product mix and execution (especially execution) – have protected it against major slumps. When you’re averaging more than $90 million per store in sales annually, you are doing a lot of things right. Over the next few years, Wegmans will again be expanding its geographical reach with new mega-stores in Charlotte, NC and Cranberry Township, PA. Still on the docket without any more detail about its status is a second Manhattan store on the Upper West Side, not far from Lincoln Center.
New York Metro Independents (Allegiance Retail Services, Associated Supermarket Group, General Trading, Key Food, Krasdale Foods) – The inside baseball view of those independent retailers (including marketing groups and wholesalers) is hard to explain. If you’re Dean Janeway Jr and George Knobloch (Key Food), Gus Lebiak and Dennis Hickey (Krasdale), Joe Garcia and Zulema Wiscovitch (ASG) Joe Fantozzi, Samer Rahman and Donna Zambo (Allegiance), and Jonathan Abad (General Trading) you’ve spent your entire careers understanding the nuance that comes with supplying and servicing the hundreds of smaller supermarkets, superettes, bodegas and greengrocers that abound in the five boroughs of New York City. Still, it’s a challenging environment for them and the retailers themselves who have created a playing field that often doesn’t have a rulebook. Key Food and Krasdale continue to battle fiercely for the top spot. The independent retailers, many with family heritages, who operate in the Bronx, Brooklyn, Manhattan, Queens and Staten Island, thrive in an environment that most conventional retailers and wholesalers (e.g. UNFI) don’t understand and want no part of. There’s no other subculture in the country like it and if you could move the clock forward 25 years, I don’t think much will have changed.
Amazon Grocery – “Godzilla’s” brick-and-mortar “Grocery” division now only consists of one brand – Whole Foods Market (WFM), which had a very solid year, opening seven new “natural and organic stores and posting healthy comp store sales. Extinct as the dodo, is Amazon’s former physical store grocery operation – Amazon Fresh – which no longer exists after the parent firm declared it a loser. Four of Whole Foods new stores opened as Daily Shops, the company’s version of an urban miniature WFM. Just as Amazon Fresh (and Amazon Go and Amazon Books and Amazon Style and Amazon 4-Star and Amazon Pop Up Shops) failed, the world’s largest online merchant is not giving up. Next up on the project docket is Project Kobe – the company’s brick-and-mortar answer to Walmart’s SuperCenter. Set to debut as early as next year in suburban Chicago and with other locations tabbed for Cherry Hill and Edison, NJ why not go big (or not go at all)? I mean, if the company couldn’t grasp operating 25,000 square foot grocery stores, what would make anybody think that opening stores 10 times that size featuring food and general merchandise would be much easier? Then again, the sheer earnings return from Amazon Web Services and its burgeoning advertising division alone, could support multiple more failures. That why they’re Godzilla.
Aldi – My words of last year ring true again as the German-owned discounter put together another stellar year, combining new units with strong comp store sales. Those words were: if we could award a “best in class – small store division” trophy, Aldi would win. Its model is not for all shoppers and it’s still tough to buy one’s total weekly purchases in a footprint that’s typically smaller than 25,000 square feet, but for what it is, Aldi scores very highly. There’s enough product diversity to fill most of one’s shopping cart and its relationship with its private label vendors is strong, yielding high-quality products. Strong management, excellent store design solid in-store execution and deep corporate pockets make Aldi a top-tier food retailing powerhouse for today and in the future.
Albertsons Accuses Kroger of Manipulating Divestment Strategy
Great reporting by business publication BoiseDev on a new development in the ongoing Kroger-Albertsons lawsuit currently being reviewed in Delaware. The Boise, Idaho-based media outlet (which is also home to Albertsons), offered this update on the legal proceedings which are now 18 months old.
Albertsons’ high-stakes lawsuit over a $600 million fee it says rival Kroger owes it due to a failed merger is putting top executives under oath and sparking a fight over a ‘highly damaging’ document Kroger says Albertsons shouldn’t have. The day after two judges decided to block a merger deal between the two grocers, Boise-based Albertsons sued Kroger for a $600 million fee it said Kroger owed it, plus damages.
The court proceedings have quietly hummed along, largely out of the public limelight for more than a year. But a BoiseDev review of filings in Delaware Chancery Court shows Albertsons’ attorneys think they have a key piece of evidence in their possession, and Kroger has asked a judge to keep it out of the proceedings.
Albertsons and Kroger have gone back and forth over the strategy around the merger, which would have had Kroger buying most of Boise-based Albertsons. Albertsons said Kroger ran a flawed strategy that didn’t work to appease Federal Trade Commission regulators, who wanted to see stores sold off to third parties to ease antitrust concerns. Kroger said Albertsons tried to undermine the deal.
In March, Kroger demanded that Albertsons strike several documents it had in its possession from the record, after Albertsons said Kroger had “orally attempted to claw back” a key slide. Albertsons said the “divestiture strategy” slide, which had been presented to Kroger’s board of directors during the merger process, showed what Albertsons called “Kroger’s business strategy to divest unprofitable stores.” Albertsons called the slide “highly damaging to Kroger.”
“The divestiture slide reflects information revealing Kroger’s business plan to divest the lowest-performing stores,” Albertsons’ attorneys claimed. “This information is indisputably relevant. It confirms that Kroger sought to put its own financial interest first and regulatory clearance of the merger second, violating its contractual obligations to use “best efforts” and take “any and all actions” to remove antitrust impediments to the merger.”
Kroger had proposed to divest several hundred stores to C&S Wholesale Grocers, spinning off a mix of stores owned by both Kroger and Albertsons. The FTC argued that the divestitures were insufficient to alleviate antitrust concerns and said the deal would raise prices for customers. The FTC won an injunction in federal court, while a Washington state court also put the brakes on the deal, effectively killing it. Albertsons called the deal off, and the two companies continue as independent retailers.
As Kroger worked to figure out which stores to spin out, Albertsons alleges it was focused not on antitrust concerns, but on business ones. It developed a list of 327 stores to sell, with 73 of those being dropped “for business reasons (rather than antitrust reasons),” Albertsons’ lawyers contend.
Kroger’s then-CFO Garry Millerchip, who is now a Costco executive (chief financial officer), wanted a different plan
The Albertsons filing said Millerchip pushed to “cherry-pick” the “least profitable store in each area,” and that it wanted to sell its “least valuable ‘banners’ or store trade names.”
In addition to the court action over the divestiture strategy, Albertsons and Kroger have been battling over thousands of documents that Albertsons wants to see, but Kroger wants to keep hidden.
In filings, Albertsons said a number of Kroger executives, including former CEO Rodney McMullen, argued they were following the advice of their attorneys in defending which stores they decided to spin off to C&S. The strategy forced Kroger to allow Albertsons to view some documents produced by attorneys for Kroger in the case. But Albertsons said Kroger only produced about 400 documents out of a total of 34,000, which Albertsons says isn’t sufficient.
The two grocery giants have not been able to come to an agreement and are waiting on Delaware Chancellor Lori Will to issue a decision on the discovery dispute.
Depositions in the case are largely complete. Former Albertsons CEO Vivek Sankaran, current CEO Susan Morris, Albertsons board member Jim Donald, McMullen, Millerchip, and several Kroger board members have been questioned. Representatives from competing grocers Lidl and SaveMart have also been deposed.
Unless the two sides decide to settle, the case could proceed to a trial, with Chancellor Will presiding. The so-called bench trial would not include a jury.
‘Round The Trade
In Walmart news: three key veteran Walmart executives will be leaving the company by the end of this month. At its Sam’s Club unit, Tom Ward, COO, will be retiring and Diana Marshall, executive VP and chief experience officer, is resigning. Also exiting mothership Walmart will be Cedric Clark, executive VP-U.S. store operations.
Returning to Sam’s to replace Ward is Steve Shrobligen who will be EVP/COO, moving over from the post of COO at Walmart Canada. Before his Walmart stint, he had spent more than 30 years at Sam’s Club in various roles. No replacements for Marshall or Clark have yet been named.
Philadelphia is one of seven cities where Walmart plans to add drone service in 2027, marking a rapid expansion of its partnership with Wing, a company owned by Alphabet, parent firm of Google. Wing’s drones can reach 60 mph and use a tether-type device to lower packages to a driveway or yard within a 30-minute window.
In addition to Philly, New Orleans, Memphis, Phoenix, San Diego, San Francisco and Salt Lake City have been added to the expanded list of cities adding drone service. Starting with its pilot program in Houston in January 2026,Walmart customers in Atlanta and Dallas-Fort Worth are currently receiving drone deliveries.
The National Labor Relations Board (NLRB) has rejected Amazon’s assertion that there was misconduct in UFCW Local 1776’s effort to organize a Whole Foods store in Philadelphia on Spring Garden Street in early 2025. Workers at that store voted 130-100 to organize and Amazon quickly appealed the fairness of the process.
This isn’t the first pushback attempt from Amazon, which lost a union certification attempt at one its fulfillment centers in Staten Island in 2022 and is still fighting the outcome. Expect a long and winding journey for what would be the first unionized Whole Food Market in the country.
After some internal movement from its board of directors last month (Lou Scaduto stepped down as chairman and chief executive), Allegiance Retail Services (ARS) has elected a new board for 2026-2027. Jason Ferreira, who was named interim chairman and chief executive officer when Scaduto resigned, has been elected chairman and CEO. Esmail Mobarak is now treasurer and Angelo Avena, John Estevez, Noah Katz, Michael Mignosi, Joseph Parisi and Fouad Elayyan have been chosen as directors. ARS president and COO Joe Fantozzi will serve as manager by appointment.
After Arthur T. Demoulas (Artie T) lost his case in Delaware Chancery Court last month to regain control of Market Basket, the current non-executive leadership team consisting of Artie T’s three sisters might have chosen an heir apparent to run the 95-store powerhouse New England regional chain (if they don’t sell). Michael Kettenbach Jr., son of Frances Kettenbach (who along with Glorianne Demoulas Farnham and Caren Demoulas Pasquale control the majority of Demoulas’ equity), has reportedly been named director of operations reporting to Chuck Casassa, also newly appointed as president.
It also appears that Artie T won’t challenge the Delaware Court ruling, having let the 30-day appeal process lapse on May 20.
Big opening for the first Manhattan Aldi store which cut the ribbon earlier this month at 311 West 42nd Street. If I were a betting man, I’d wager this will eventually become the Batavia, IL-based discounter’s highest volume store in the country.
A tip of the hat to our buddy Dan Croce, who has left Sprouts to become CEO of Produce Junction, the 20-store produce and floral retailer based in the warehouse capital of New Jersey, Swedesboro. Dan’s literally logged millions of miles nationally over the past five years as senior VP-real estate for Sprouts; it’s great to see him back home and ready to use his expertise and experience to take Produce Junction, a gem of an operation, to the next level.
Just before presstime, we learned of the death of Clive Davis, 94, who couldn’t sing, write or play an instrument, but as the former president of Columbia Records and Arista Records, he managed and recorded a list of music Hall of Famers including Aretha Franklin, Whitney Houston, Alicia Keys, Miles Davis, Janis Joplin, Bruce Springsteen, Rod Stewart, Billy Joel, Aerosmith and Santana (and literally dozens more).
An attorney by trade, Davis, according to the New York Times, “was a moderately paid associate at a white-shoe firm in New York, but the job bored him. When a position for an in-house lawyer opened at Columbia – then a division of CBS, one of the firm’s clients – he eagerly took it. Rising quickly through Columbia’s corporate ranks, Mr. Davis became president in 1967 and began to reshape the label to compete in changing times.”
In the 2017 documentary, “Clive Davis: The Soundtrack of Our Lives” (worth watching) he said: “I knew nothing about music.” But he had an uncanny knack for spotting new or underused talent and, with the business instincts of a cobra, Davis became the most influential behind-the-scenes music personality of the past 50 years.
His entrepreneurial skills weren’t too shabby either. When Columbia fired him in 1973 for alleged ethics violations, Davis rebounded in less than a year by taking over struggling Bell Records and rebranding the label as Arista. At Arista, he built a diverse roster in the 1970s, including Patti Smith, the Kinks, Lou Reed, Gil Scott-Heron and Melissa Manchester.
According to the Times, Davis also proved to be revivalist, resurrecting the career of highly talented female singers whose popularity had wanted. Those included Dionne Warwick in 1979 with “I’ll Never Love This Way Again,” which became her first Top Five solo single in a decade. Then came Aretha, whose 1985 album, “Who’s Zoomin’ Who?,” became her first million-seller.
On the discovery side, he found even greater success with Whitney Houston (Dionne Warwick’s cousin) who signed with Arista at age19 in 1983, and strongly benefited from Davis’ presence both as a promoter and as a critic. When Houston recorded “I Will Always Love You” for the soundtrack to the 1992 film “The Bodyguard,” she sang the first 40 seconds of the song a cappella, at the suggestion of Kevin Costner, her co-star. When Davis heard the track, he insisted on keeping it that way, over the objections of the song’s producer, David Foster, and others at the record company, who feared that such a long, bare introduction would hurt the song’s chances on the radio. Davis prevailed, and “I Will Always Love You” held the No. 1 spot for 14 weeks.
At age 85 in 2017, Davis told the Times “I still love it. “Whether it’s doing those albums, or doing my Grammy party every year, it’s a great feeling. I got into this totally by luck, and it’s just wonderfully fulfilling.” Not bad, from a kid from Brooklyn named Clive.