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Question of the Day
The fight over Washington-area grocery dollars is expected to get more aggressive this year.
Giant Food stores are expected to see a continued decline in its Washington-area market share this year according to a grocery trade publication, as Safeway Inc. and some of the smaller chains trying to break into the market make gains.
Grocers are competing over the approximately $9.25 billion Washington-area residents spend at supermarkets each year, according to Food World, the Columbia, Md., trade magazine that publishes a study of the local grocery market each year.
“The results show a trend we’ve seen for a while: that there is more competition year over year for Giant and Safeway,” said Sandy Paul, national research director at Delta Associates, an Alexandria real estate research firm. “Whole Foods, Harris Teeter and Wegmans — those retailers have learned that greater diversity in products and catering to the wealthier consumers can pay off in this market.”
But for now at least, Giant, Safeway and Shoppers Food & Pharmacy have maintained their respective first, second and third positions.
Giant’s 133 stores are expected to pull in $3.4 billion in sales this year and control 37.12 percent of the market, down from 38.02 percent last year. Safeway’s 109 stores are expected to pull in $2.6 billion and 27.69 percent of the market, up from 27.48 percent last year.
A number of smaller chains are making inroads in the Washington market. Whole Foods Market, Harris Teeter and Weis Markets Inc. are expected to gain market share this year. Wegmans Food Markets, Super Fresh and Magruders Supermarkets are expected to lose some market share.
“Chains that used to be considered niche are really forecasting the direction that the Washington grocery market is headed,” he said.
The Washington area’s hometown chain, Giant, is taking steps to improve its position.
“The competition has increased significantly in our market and Giant is indeed taking a number of steps to maintain our market share,” said spokesman Barry Scher.
The Landover chain has introduced a prototype store with upgrades such as larger produce sections, prepared foods, cheese shops and in-store Starbucks shops. In the fall, Giant introduced a “value improvement program” by reducing prices in certain departments, including produce, paper products and baby goods.
The second-largest chain in this market, Safeway, contributes its continued growth in the market to its “Lifestyle” format. Safeway has converted about half of its Washington-area stores to the new format — which highlights the bakery, deli and perishable departments — with plans to convert the remaining stores within the next three years.
“Shoppers notice and appreciate the difference,” said spokesman Greg Ten Eyck.
Third-place Shoppers is slated to bring in $1.3 billion this year and a 14.56 market share, a slight decline from last year’s 14.89 percent. Food Lion, the fourth-largest chain in the market, is expected to bring in $777.5 million in sales and an 8.4 percent market share, up from 8.15 percent last year.
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