Supervalu Exiting the Cincinnati Market

[Ohio Man]

At one time therre was even a biggs way out in Denver. I think Wally or Super Wally might occupy the site now.

Yeah, I'm sure what's happening in Cincy is happening a lot of other places in the country. I would hate for Kroger and Wally to eventually be the only big players in town. It would be interesting to have another big player enter the market by taking over the biggs locations slated for closure. Going against Kroger, Wally and Meijer is quite a challenge. Giant Ealge competes with all three in Columbus, though. But who knows, Remke might well have not been the first company that Supervalu talked to about purchsing biggs locations. Giant Eagle and/or any number of other players might have been approached and said thanks but no thanks.

I remember the '80s Cincinnati supermarket scene. Kroger was first, Thriftway second, and IGA third. Thriftway, of course, is gone, and IGA, while still around, has far fewer locations in the area. And since IGA is basically a cooperative of independents, it's hard for them to compete with monoliths like Kroger or Wally. It's sad in a way.

[krogerclerk]

Giant Eagle would be the best bet for entering Cincinnati, but I don't think that's going to happen anytime soon. Marsh's would have been a good contender for entry in the past but it looks as if the Indiana chain's days are numbered as Sun Capital is considering selling Marsh's.

The problem for Cincy is the population of the region is growing slowly, meaning for every supercenter and superstore, the pie slices get thinner faster than the pie can grow. Obviously the independents and weak links in the market give up the biggest pieces fast.

There are several markets that traditional conventionals do well against the juggernaut of Walmart and Kroger. Houston, with Walmart and Kroger in the top two spots for instance, with HEB growing its base with Safeway's Randall's is losing ground but still a strong player. Denver is dominated by Kroger's King Soopers and Safeway with Walmart strong while Albertson's is fading. Atlanta is Kroger, Walmart and Publix. Dallas/Fort Worth still has a strongly competitive market with Walmart, Kroger, Tom Thumb(Safeway), Albertsons and Minyard's while HEB has only entered with a limited Central Market presence and the future of the last three is questionable. Phoenix has Fry's(Kroger), Safeway, Walmart, Basha's , and Albertsons. Memphis is dominated by Kroger and Walmart but Schnuck's is doing surprisingly well while Nashville long dominated by Kroger, has seen the entry of Publix, Harris-Teeter(though its long term prospects are doubtful) and Food Lion. Throughout Florida, both Publix and Winn Dixie has a sizeable store base against Walmart while Sweetbay adds a strong conventional in the Tampa Bay/SW FLA region while Albertson's has become a non-factor.

Giant Eagle, HEB, Kroger, Publix, HyVee, Meijer, and Schnuck's are examples of chains that shown they can continue to do well agains Walmart, but Kroger is the only one with a large geographic footprint that faces Walmart in virtually all its key markets. The rule of thumb for the end result of Walmart's entry into the grocery market is that the number 1 player and usually the number 2 chain pick up business from the stores that are shuttered by Walmart, thus they tend to maintain their volumes over the long term, suffering only short term sales losses from the opening period of Walmart.

[Ohio Man]

Marsh does have a handful of its Marsh Hometown Market stores in Greater Cincinnati. They were rebranded not too long ago from LoBills, which is Marsh's discount grocery imprint. But yeah, I don't think a major Cincinnati push is something Marsh is able or willing to do.

I agree about the long term trends set in motion by Super Wally. Still, it isn't completely out of the realm of possibility that another chain might give it a try. Food Lion is in Dry Ridge, Kentucky, which is less than 40 miles from Cincinnati. Many predicted that store would close after Super Wally moved in nearby a few years ago but that hasn't happened. I was in a couple of Food Lions while on vacation in Maryland this past summer, and they were much better than I remembered them being in the early 90s in Knoxville. But the odds of that particular Southern-identified chain coming into Cincy after Winn-Dixie's experience in the area? Hmm, probably not that good. Still, I hope that some company takes on the challenge...

[marshd1000]

It is kind of a shame that Kroger didn't buy biggs. I have never been in Cincinnati but I am assuming that biggs is kind of similar to Fred Meyer. So the biggs stores with general merchandise could have been Kroger-biggs and the biggs that were just supermarkets could have been just Kroger. I know that Kroger has been building Kroger Marketplace stores but the co bannering of this could have made it easier to tell the difference. But in my opinion, it is a lost opportunity for Kroger.

[tesg]

Biggs isn't anything like Fred Meyer (that's Meijer's market). Their general merchandise section was pretty small and not nearly as extensive.

Kroger probably couldn't have bought them if they wanted to. Anti-trust flags would have flown everywhere.

[krogerclerk]

I was surprised that the FTC allowed Kroger to acquire a few former Thriftway's when Winn-Dixie exited the Cincy market. Kroger has hovered around a 50% market share in the region since Albers/Colonial/Big Star and A&P shuttered their operations beginning in the early 1970's. Marsh attempted to gain a foothold in the 70's and 80's, but was never as successful as they had hoped, yet have managed to maintain a scattered presence since then.

As I have said, Giant Eagle and Meijer seem to be the best hope for competition in the Cincinnati-Dayton region, though an expansion from Food Lion wouldn't be out of the question. I'm sure as a regional player, Giant Eagle has considered the problems facing Marsh and Big Bear when taking on Kroger in their home turf, as well as having more limited access to financing for expansion. I believe Food Lion had planned to move into Ohio when their problems from their rapid expansion and bad publicity forced them to exit several newly entered markets including Texas, Oklahoma and Louisiana and many of their Pennsylvania stores. Delhaize seems to have focused on Food Lion's existing markets for expansion and infill for the present, along with a diversity of banners from Bottom Dollar to Bloom to segmentize their marketing reach.