They seem to be doing okay. Although they are under the whole Associated Food/Fresh Market thing, so they’re not totally independent, but its the same people running them as the old store and it definitely has some of the same local and/or quirky stuff that the old store did.
Oh, and I didn’t notice Smapti’s post above mine. I’d heard some of the Haggens weren’t doing great, but hadn’t heard about the bankruptcy. That sure didn’t take long!
My family was in the food supply business most of their lives, and I worked in it for a few years after college. It’s a really strange business, compared to most.
It truly is really, really small profit margin.
Customers visit frequently (most of them every week.) So repeat business is important (thus the plethora of frequent customer ‘Rewards Cards’.)
The 2 business options are:
The low price option became much harder when Walmart & Target entered the business – they can subsidize the cost of groceries by the profits they make on selling overpriced clothes, gadgets, etc. And it’s well-worth it to get customers into the store more often.
So that leaves the differentiation option. And you can’t do that on your products – the box of Wheaties in your store is identical to that in the next store. You can try to make sure your produce or meat or bakery has better products, and some store do this, but most of that comes from a few big suppliers, that probably also supply the next store, too.
You can try to offer a larger selection of products, but that has costs: more inventory, more labor in restocking, need a bigger store floor space (which tires customers out), etc. And you likely get your supplies from 3-4 major grocery wholesalers: any items you sell the next store can offer too, if they see that it’s selling well for you.
So the main differentiation for most stores is service – they try to provide more/better service to their customers. Thus you see extended hours, faster checkouts, re-introduction of bagboys, carrying your bags to your car (or drive-up loading spots), prepared deli foods, pre-ordering online for in-store pickup (or even home delivery), and added services like in-store banks, pharmacy, florist, etc.
Stores are now trying to ‘personalize’ service. I’ve noticed recently that my regular store now encourages customers to scan your credit card while they are still scanning the items, then it pops up your name on the register, and the checkers clearly have been instructed to address you by name at least twice during checkout. Suppliers are experimenting with facial-recognition computer cameras at the doors, so when you pick out a shopping cart, an automated voice can say “Welcome to our store, Mr. ____” as you enter.
All in an effort to make the customer feel more welcome, more ‘at home’ in their store, and less likely to shop elsewhere.
In the Chicago area, the Safeway-Albertson’s merger led to all the Dominick’s (Safeway) stores closing. A number of them have been turned in Mariano’s grocery stores and I think some are now Tony’s (a local chain). This actually worked out fairly well for me since the local Jewel has been stepping up its game to try to compete and is offering things like an expanded salad bar, fresh squeezed orange juice and other new items that the other chains are carrying.
Also, Mariano’s kicks the collective ass of Dominick’s and Jewel. I’d hardly set foot in a large chain supermarket other than Costco in years until Mariano’s opened up here - anything I couldn’t buy at Costco came either from Fresh Farms or from a myriad of small ethnic and specialty stores and produce stands.
Jewel is owned by Albertsons and Mariano’s Fresh Market by Kroger. There are very few, if any, independent regional markets left.
We try very hard to support small, family owned/operated local businesses. For groceries we first shop at a local farm market. We buy lamb, turkey, and beef that is raised and slaughtered locally.
Only then do we buy whatever else we need at our Giant Eagle.
I knew that; Tony’s is the local chain (eleven locations all in Chicagoland). Mariano’s was expanding into the area but exploded with the opening of the old Dominick’s real estate.
Really though, the net effect for me is that the local Jewel is obviously trying harder to compete. That might just be the case when they’re in close proximity to the other stores – the Jewel out where I work in the exurbs is safely far away from competing supermarkets and is nice enough but lacks the new amenities the one by home has opened.