You know all those grocery stores we used to have?

One of the most popular threads here at Back Talk concerns grocery stores:  Which ones are around, which ones will stay around and which ones will come into the neighborhood. So I asked a friend of mine, who does this sort of analysis for a living, what he thought of our current situation -- the difficulty Albertson's is having in Dallas-Fort Worth, Minyard's all but gone, Safeway trying to resurrect Tom Thumb, chains that have failed like Winn-Dixie and Food Lion, and Wal-Mart increasing its presence almost daily.

He has to remain anonymous, since he gets paid by clients to make these forecasts and I don't want him to get in any trouble. But what he says is very revealing.

"It looks like this is a scenario that could play out in a lot of markets with a new Big 2 -- Wal-Mart and Kroger or Safeway and/or a strong regional player like HEB/Central Market, a strong club format -- COSTCO or Sam's -- and specialty formats like Trader Joe's and Whole Foods showing strong growth. A wild card is how well Target is able to grow its Supercenter format. I think it will be difficult for multiple traditional grocery retailers to prosper in the same market in the future. Long term, there probably won't be more than two with significant share per market."

None of which is good news for Alberton's.

Comments

[Harley Jebens]

So, basically, Wal-Mart not only drives small town local merchants out of business when it moves into an area, but now it's crushing large grocery store chains as well? And we're looking at a future where we can choose either Super Wal Market or a specialized Whole Foods type of store? Wonderful. Just wonderful. One wuick question, if anyone knows the answer - how are the supermarkets like Carnival that target a different (i.e. hispanic) clientelle doing? Do they face the same sort of pressures?

[Jeff Siegel]

Yep, that's more or less it. Wal-Mart is doing even more damage in other parts of the country like the South and East Coast. The Hispanic-focused chains like Fiesta and Minyard's/Carnival are apparently struggling (though both are private and don't release financial data). Another friend of mine, a Latin American scholar who travels extensively in Central and South America, says Hispanic shoppers in this country care just as much about price as Anglo shoppers do.

[Jake]

I work for minyards, and our current move right now is to get rid of all of the Minyards and Sack N saves, and make them huge carnival supermarkets. The carnival stores are beginning to boom as far as sales growth. They are going to use it as the engine for the company as soon as they get all of the minyards and sack n saves out of the way.