ShopRite to Exit Albany

[marketreportblog]

https://www.timesunion.com/news/article ... 437974.php

From Albany’s Times-Union: ShopRite is leaving the area and closing their five stores there.

[TW-Upstate NY]

Surprised the article didn't mention this is their second retreat from the area after leaving in the late '80's. Difference this time is the stores are owned by Wakefern and not by one of their members.

[mjhale]

Is there something about Shop Rite that causes them not to have huge success when they leave their core NJ market? I know it depends a lot on the operator, however, it seems like Shop Rite struggles if they are not in NJ. Shop Rite has bailed on all but one Price Rite location in the DC/Baltimore area. Also, one Shop Rite near Beltsville, MD closed as well as another in Glen Burnie, MD. The former Kleins stores along I-95 seems to be the furthest south that Shop Rite has had consistent success. I had heard that Shop Rite had stores in the immediate DC area in the 1960s but those are long gone. I've always wondered if a Shop Rite operator with a long track record or Wakefern itself would be a good candidate for some of the cast offs from the Kroger-Albertsons deal.

[mbz321]

Is there something about Shop Rite that causes them not to have huge success when they leave their core NJ market?

As someone in the area (Southeastern PA with a decent amount of ShopRite stores), it has me puzzled as well. The only thing I can think of is ShopRite's are generally super high volume stores, so even if the stores did average business, it might not have been enough for them to hit the sales typically seen at stores closer to their home market. I certainly don't see Hannaford or Price Chopper (the two dominant chains in that specific region) being better on price. I'm not sure if there is a closer Wakefern distribution center than North Jersey (which would be an over two hour commute up to the Albany location), but I imagine that transportation costs were a factor in some of these far-out locations (although they do have some stores that stretch far north into Connecticut?)

[marketreportblog]

I'm not sure if there is a closer Wakefern distribution center than North Jersey (which would be an over two hour commute up to the Albany location), but I imagine that transportation costs were a factor in some of these far-out locations (although they do have some stores that stretch far north into Connecticut?)

Transportation might be a factor, but don’t forget they’re operating Price Rite stores all the way from the Capital Region to way out in Rochester, Buffalo, and Erie.

Which makes me think — in the past when ShopRite has pulled out of areas (NY by Big V and CT by Mott’s), some of the stores stayed on as Price Rites or, earlier, Cost Rites, right? Any chance of that happening here?

[BillyGr]

Is there something about Shop Rite that causes them not to have huge success when they leave their core NJ market?

It just depends on the area, I guess. What isn't noted in the post is that the store in Hudson is staying. That is about a half hour (maybe 40 minutes since there is no Interstate all the way) south of Albany. That store was there back when Big V closed the original stores in Albany and has stayed ever since. In fact, the Price Chopper there actually closed up and now ShopRite is in their building (was newer and a bit larger, they also inherited a pharmacy which did NOT close when others did a year or so ago).

So, they do just fine with that store and can even beat PC (they also have one in the old South Hills Mall outside Poughkeepsie that was also a PC that closed up), but for some reason not so much in this other area only a short distance away.

[BillyGr]

I'm not sure if there is a closer Wakefern distribution center than North Jersey (which would be an over two hour commute up to the Albany location), but I imagine that transportation costs were a factor in some of these far-out locations (although they do have some stores that stretch far north into Connecticut?)

Transportation might be a factor, but don’t forget they’re operating Price Rite stores all the way from the Capital Region to way out in Rochester, Buffalo, and Erie.

Which makes me think — in the past when ShopRite has pulled out of areas (NY by Big V and CT by Mott’s), some of the stores stayed on as Price Rites or, earlier, Cost Rites, right? Any chance of that happening here?

In fact, one of those PriceRite stores is in Schenectady, only 5 minutes or so from the Niskayuna regular ShopRite that was the first to open when they re-entered the market. That PriceRite is not impacted as far as has been stated (since, as you say, getting there en route to those western areas would be easy enough.

As to the closing stores, there is nothing definite. One suggestion has been that they sold them all to someone else, but there is a non-disclosure agreement so no details as to who (or if it is even a grocery store).
Someone else suggested that there was an issue between the union and Wakefern (as they were unionized stores unlike others locally).
A third person (claiming to work for them in one of the stores) mentioned Stop & Shop, but that seems unlikely given that they are connected to Hannaford now, so it would be odd to bring in just a few of their stores where Hannaford is already fairly present.

So, three things that have been speculated, but no clue to which, if any, are actually correct.

Just FYI - from what I've read, Cost-Rite was a name created by Big V (and I do remember one in Catskill, just across the river from Hudson or a time), since back then PriceRite was a corporate thing and they didn't license it out to members like they have more recently. Certainly makes sense that they would try something like that as a way to use older stores that weren't worth upgrading (or maybe by that time their own issues didn't permit funding an upgrade/replacement like Hudson got).

[TW-Upstate NY]

Only having 5 stores in the Albany area is not exactly going to give you the market penetration you need to grab share from other chains. It made them a niche player at best. Golub has five stores in Albany and three in Schenectady alone (four if you count the Scotia store out on NYS Route 50.) That's close to double the number of Shop-Rites region-wide in just those two cities. They also have dozens of stores in the surrounding area. And that's just one chain who also happens to be the home team around here and for better or worse customers are pretty loyal to it. Hannaford doesn't have as many locations but they have a good reach as well. I remember when Shop-Rite announced they were coming back and have to admit I was quite excited about it and even now am sorry to see them go. But with all that in mind, I also thought to myself at the time that the market they were entering was vastly different than the one they left. Golub was firmly entrenched of course but is even more so now and Hannaford (then known as Shop 'N Save) was just getting started and has established a following. And I'm sure at the time, both Golub and the then upstart Hannaford grabbed a lot of former Shop-Rite customers and kept a lot of them even when Shop-Rite came back. Aldi wasn't around and neither was Wally-World so I guess my conclusion/question is: what the heck was Wakefern thinking?

[BillyGr]

Only having 5 stores in the Albany area is not exactly going to give you the market penetration you need to grab share from other chains. It made them a niche player at best. Golub has five stores in Albany and three in Schenectady alone (four if you count the Scotia store out on NYS Route 50.) That's close to double the number of Shop-Rites region-wide in just those two cities. They also have dozens of stores in the surrounding area. And that's just one chain who also happens to be the home team around here and for better or worse customers are pretty loyal to it. Hannaford doesn't have as many locations but they have a good reach as well. I remember when Shop-Rite announced they were coming back and have to admit I was quite excited about it and even now am sorry to see them go. But with all that in mind, I also thought to myself at the time that the market they were entering was vastly different than the one they left. Golub was firmly entrenched of course but is even more so now and Hannaford (then known as Shop 'N Save) was just getting started and has established a following. And I'm sure at the time, both Golub and the then upstart Hannaford grabbed a lot of former Shop-Rite customers and kept a lot of them even when Shop-Rite came back. Aldi wasn't around and neither was Wally-World so I guess my conclusion/question is: what the heck was Wakefern thinking?

Although, when the first one opened in Niskayuna, people were coming from all over the area (even out towards Amsterdam, beyond the main Albany/Schenectady area) to shop there. Either those who remembered the old stores, or people who had moved from other areas, perhaps.

The question is what or when did they stop drawing people from these larger areas (aside from splitting people out as they opened more locations)?

Also to note, that they for a long time after the first closures ran ads in the Times Union (mainly for the Can Can) advertising the still open Hudson store. Seems that must have been a decent draw (or else they wouldn't have done so repeatedly). Maybe that gave them an idea that there was still interest in the brand from the Albany region and that people would return?

There is also some oddity with this - check the Facebook pages for the impacted stores, and more comments seem to indicate that they found the stores busy than those that agree with the official answer. Personally, it's hard to say (going at 8am Sunday isn't the best time to judge how busy a store is), but the few times I was running later it did seem to get progressively busier by the hour (or even half hour), so I can see many seeing that if those were the times they went.

[storewanderer]

Shop Rite seems to be used to running very high volume stores and even medium volume isn't satisfactory for them.

I think they do have a number of operator stores that are medium volume, though.