Rouses market area

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Rouses market area

Post by pseudo3d »

I always thought that Rouses was basically the Louisiana version of H-E-B...Louisiana focused and a growing force in the state. And while that may be true in some regards, the spread of stores wasn't what I expected, not since I found a location opened a few years in Gulf Shores, Alabama. "A Rouses thirty miles away from Florida? ...wow!"

But the store's market area seems a bit strange for a store that has spread through acquisition and not marred with weird gaps in its market areas from far-flung acquisitions or market pull-outs. The market seems to be mostly spread throughout the area of Louisiana east of the Mississippi with a few stores along I-10. The only stores west of the Mississippi River are three stores in Lafayette, a partial result of the Atchafalaya Basin that restricts development. From reading, apparently Rouses doesn't self-distribute but rather uses AWG, which has a distribution center in Slidell opened in 2013. But if they were using AWG, logistically nothing should prevent them from opening stores in more northern/central Louisiana, and I'm sure that the existing DC could probably reach Lake Charles, where I'm sure Rouses could compete well with Albertsons and Kroger, or going further north into MS. Or is it more a cultural thing?
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Re: Rouses market area

Post by wnetmacman »

pseudo3d wrote:I always thought that Rouses was basically the Louisiana version of H-E-B...Louisiana focused and a growing force in the state. And while that may be true in some regards, the spread of stores wasn't what I expected, not since I found a location opened a few years in Gulf Shores, Alabama. "A Rouses thirty miles away from Florida? ...wow!"
The Alabama stores were a direct result of the failure of Belle Foods. All of those were former Delchamps, then former Bruno's, then former Belle Foods.
pseudo3d wrote:But the store's market area seems a bit strange for a store that has spread through acquisition and not marred with weird gaps in its market areas from far-flung acquisitions or market pull-outs. The market seems to be mostly spread throughout the area of Louisiana east of the Mississippi with a few stores along I-10. The only stores west of the Mississippi River are three stores in Lafayette, a partial result of the Atchafalaya Basin that restricts development. From reading, apparently Rouses doesn't self-distribute but rather uses AWG, which has a distribution center in Slidell opened in 2013. But if they were using AWG, logistically nothing should prevent them from opening stores in more northern/central Louisiana, and I'm sure that the existing DC could probably reach Lake Charles, where I'm sure Rouses could compete well with Albertsons and Kroger, or going further north into MS. Or is it more a cultural thing?
The main thing that prevents them is funding. Rouses is a family owned company, and they control expenses. The original goal was just to get to Baton Rouge, which they just did recently. New Orleans and Mississippi were largely bought through an A&P fire sale. Lafayette was a natural expansion, essentially them being in the right place at the right time.

They are still involved in a lawsuit with Associated Grocers Baton Rouge, and the split that they were involved in. AWG is a better fit for them, and they have benefited greatly. Piggly Wiggly uses them in a few stores as well.

I agree that their expansion has been strange, but it has largely been opportunistic acquisitions. Only Lafayette has been true organic growth for them outside Thibodaux/Houma (which are also west of the Mississippi River, by the way).
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Re: Rouses market area

Post by wnetmacman »

pseudo3d wrote:But if they were using AWG, logistically nothing should prevent them from opening stores in more northern/central Louisiana, and I'm sure that the existing DC could probably reach Lake Charles, where I'm sure Rouses could compete well with Albertsons and Kroger, or going further north into MS. Or is it more a cultural thing?
West of Lafayette, you begin running into Market Basket of Texas and Brookshire Brothers. I would suspect that's why they haven't ventured to Lake Charles yet. Alexandria is a Super 1 Foods town. 3 stores to one each from Albertsons and Kroger. The only other places in Southern MS they could go are Hattiesburg and Natchez, who also still have other independents.
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Re: Rouses market area

Post by Knight »

Rouse's found competition expanding eastward. It has met Publix in Mobile and Baldwin counties in Alabama.

Publix should be in position to expand westward into Mississippi. Louisiana is doable after Publix develops a presence in Mississippi.
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Re: Rouses market area

Post by pseudo3d »

Knight wrote:Rouse's found competition expanding eastward. It has met Publix in Mobile and Baldwin counties in Alabama.

Publix should be in position to expand westward into Mississippi. Louisiana is doable after Publix develops a presence in Mississippi.
I don't know about that. Publix's lack of an entry into MS probably is more from an interest standpoint than to a distribution standpoint. Yes, they don't have a big DC that can supply MS effectively, I've heard that, but they've shown far more interest in expanding north than west. Publix opened stores in Georgia and SC (1991 and 1993 respectively) before even opening their first Alabama store (in 1996) and have since gone to NC, TN, and VA since then without a single store in MS. If they were that interested, they would've taken some opportunity to do so, and at this rate I genuinely think that Publix will compete with Meijer before it really enters LA proper. Publix's growth patterns more and more resemble "East Coast" than "Southeast" as SEG/Winn-Dixie does/used to do.

Rouses footprint will probably spread as opportunity presents itself. Purchasing the 34-store Market Basket chain (which has been pretty stagnant as of late) would give them an entry into Texas and southwest Louisiana.
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Re: Rouses market area

Post by buckguy »

Publix might have stores near Memphis or near the Florida Panhandle, but where else other than Jackson would have the density & well off customers to support their stores?
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Re: Rouses market area

Post by wnetmacman »

buckguy wrote:Publix might have stores near Memphis or near the Florida Panhandle, but where else other than Jackson would have the density & well off customers to support their stores?
Hattiesburg - not served by any national grocer except maybe one Winn Dixie. Pretty good college town.
Gulf Coast - only served by WD and Rouses, and WD is weak. Rouses has already closed one store they bought in Long Beach.
Tupelo - same as Hattiesburg,except add Kroger and take away Winn Dixie.

I don't see Publix as being store for well off folks; it's a pretty standard grocer to me. They could probably take over Mississippi without any effort, but they would face a challenge in Louisiana unless they learn the state and its tastes. That's where Rouses has done extremely well. They don't always win on price, but you cannot beat their service and selection. That's where they have faltered outside Louisiana - nobody outside the state knows what they're offering.
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Re: Rouses market area

Post by Knight »

pseudo3d wrote:
Knight wrote:Rouse's found competition expanding eastward. It has met Publix in Mobile and Baldwin counties in Alabama.

Publix should be in position to expand westward into Mississippi. Louisiana is doable after Publix develops a presence in Mississippi.
I don't know about that. Publix's lack of an entry into MS probably is more from an interest standpoint than to a distribution standpoint. Yes, they don't have a big DC that can supply MS effectively, I've heard that, but they've shown far more interest in expanding north than west. Publix opened stores in Georgia and SC (1991 and 1993 respectively) before even opening their first Alabama store (in 1996) and have since gone to NC, TN, and VA since then without a single store in MS. If they were that interested, they would've taken some opportunity to do so, and at this rate I genuinely think that Publix will compete with Meijer before it really enters LA proper. Publix's growth patterns more and more resemble "East Coast" than "Southeast" as SEG/Winn-Dixie does/used to do.

Rouses footprint will probably spread as opportunity presents itself. Purchasing the 34-store Market Basket chain (which has been pretty stagnant as of late) would give them an entry into Texas and southwest Louisiana.
Publix opened its McCalla, Alabama, distribution center three months ago. The distribution center only has a high velocity warehouse at the present. It has room to expand as needed.

The transportation network has improved. Interstate 22 in Mississippi and Alabama is ready to go. Interstate 269 in Mississippi and Tennessee is nearing completion. Accesses to Memphis, Tennessee; western Tennessee; and major cities in Mississippi are in place.

There is not much competition in Mississippi. Walmart and Kroger (Delta Division) is dominant. Winn-Dixie has set itself up for an exit. There is room and interest to open a quantity of quality stores.
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Re: Rouses market area

Post by buckguy »

Mississippi is one the poorest states in the union and has some of the widest disparities. There are trading towns like Greenwood that have enough land-based wealth to keep a fancy restaurant going but can barely support a decent chain super. Kroger has pulled out of Mississippi markets in the past and their current maps seems to skip over places like Greenville, Greenwood, Clarksdale, and even Oxford. Publix seems even less likely to blanket the state--they really are a more upscale stores than Kroger--they merchandise more in the periphery and their pricing discourages cherry pickers. If you look at where they are in Atlanta where they have reached saturation--they are missing from poorer areas to the South and have withdrawn from areas to the East that were hard hit by the real estate bubble. They've been willing to go into inner city areas with some promise of other development and gentrification, but also willing, as they did on the west side of Atlanta to leave if things don't work out. They have no stores in North or East Nashville. Beyond Jackson and some peripheral areas, Mississippi really doesn't make sense unless there is some prize beyond it.
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Re: Rouses market area

Post by pseudo3d »

buckguy wrote:Mississippi is one the poorest states in the union and has some of the widest disparities. There are trading towns like Greenwood that have enough land-based wealth to keep a fancy restaurant going but can barely support a decent chain super. Kroger has pulled out of Mississippi markets in the past and their current maps seems to skip over places like Greenville, Greenwood, Clarksdale, and even Oxford. Publix seems even less likely to blanket the state--they really are a more upscale stores than Kroger--they merchandise more in the periphery and their pricing discourages cherry pickers. If you look at where they are in Atlanta where they have reached saturation--they are missing from poorer areas to the South and have withdrawn from areas to the East that were hard hit by the real estate bubble. They've been willing to go into inner city areas with some promise of other development and gentrification, but also willing, as they did on the west side of Atlanta to leave if things don't work out. They have no stores in North or East Nashville. Beyond Jackson and some peripheral areas, Mississippi really doesn't make sense unless there is some prize beyond it.
Publix will probably make a move in MS but only the upper Mississippi area en route to Memphis, which I can see Publix doing, and possibly moving into KY. Publix going for southern Mississippi and Louisiana doesn't make a whole lot of sense. Louisiana is still a good 300 miles away from McCalla (and that's northern Louisiana). The remaining MS Winn-Dixie stores probably will go to Rouses if they get their act together in out of state areas, not Publix. If Rouses takes over Market Basket, then it will have an entry to southeast Texas and have southern Louisiana covered, without much fear from Publix. The only chance of Publix reaching southern Louisiana is if it buys Rouses, which is unlikely...and even beyond that, the Houston market is near-impossible to crack, with the only potential being a Randalls purchase (which will only give them a tiny fraction of the market share).

Chances are, Alabama will be as far as Rouses goes, and there Rouses faces stiff competition from Publix. (Keep in mind that this is a topic on Rouses, not Publix)
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