retailfanmitchell019 wrote: ↑November 28th, 2021, 4:47 pm
buckguy wrote: ↑February 8th, 2021, 5:12 am
Chicago is a large, expensive market to enter and new entrants in the past have mostly been in the distant past (50s and 60s). There used to be subregion operators and Marianos seems like a variation on that. Heinen's from Cleveland has been quietly doing this, as well.
Giant Eagle may be complacent in Pittsburgh, but that doesn't mean they won't make a strong effort if someone enters the market.
I was reading your comments in the CVS closing stores post about how Giant Eagle consolidated the grocery industry in Cleveland. How did they do this?
It's a complicated story and almost fits better with the groceteria board. I know some pieces in some depth but not others. I used to know people from a couple families involved in Cleveland supers and relatives of mine knew other people in the business through their own businesses or places they worked. Background---a number of people and their families dominated the chains in Cleveland from the end of WWII into the 80s and some of the same people founded or managed multiple chains. There was a price fixing suit in the 80s involving all of the local players which reflected just how incestuous these relationships were. The suit may have sped consolidation because of the relative weakness of one of the participants, but the consolidation really began in the early 80s when A&P and Kroger left the market. Kroger blamed labor costs but they had become a minor factor in Cleveland (small stores, poor perishables, etc.) and the decline of ancillary markets due to de-industrialization meant that they had greenhouse/superstores that couldn't be supported by the local markets. A&P had once been a market leader or strong #2 but had the same problems they'd had everywhere else and cratered from the late 60s onward. Super Valu had been a small factor but gone in the 80s. Loblaw/National Tea was a player in a few peripheral areas but was gone in the 70s. IGA had a few stores but they eventually joined other groups by the 70s. Akron's Acme chain (no relation to the Philly chain) had some peripheral stores and tried to enter core markets later but has never been a factor.
There were basically 2 very dominant chains, Fisher/Fazio and Pick-n-Pay/First National and a number of co-ops mostly allied with wholesaler Seaway Foods (no relation to Seaway Foodtown in Toledo). Fisher began as a grocery chain and once dominated the market until high costs (mostly nepotism) and the lack of a store brand hurt their pricing. Pick-n-Pay grew out of a dairy store chain and pioneered super markets in Cleveland. The Seaway-supplied co-ops were grouped by market segment, with Stop-n-Shop being large stores and usually the best local operators, Bi-Rite being and small and two groups being in inner city locations. Some of these groups left Seaway at different points and used wholesalers based elsewhere---I could never keep this straight---lots of family feuds were part of it.
Fisher expanded geographically outside Cleveland through the 70s but overextended themselves in the LA area. Pick-n-Pay went through a decline and then a renaissance in the 70s, but the First National chain (a bizarre acquisition) distracted them through the 80s. Pick-n-Pay bought the larger Krogers---the smaller ones along with most of the A&Ps went to independents or to drug store chains (Discount Drug Mart got a few of these). The co-ops benefited from Fisher/Fazio's problems (and this being a small world, Fazio had once been part of one of these co-ops) while Pick-n-Pay did ok but could have used some additional capital. Another backgrounder: many of the Seaway co-op families as well as the Fazio family and the head of First National lacked successors within their families and some had avocations they wanted to pursue---the First National guy had long been involved in the Cleveland Orchestra (he's chaired its Board for many years---his non-grocery brother was involved with the Baltimore Symphony).
Seaway and its largest clients bought Fisher/Fazio and sometime afterward Ahold bought First National and consolidated it with Tops in Buffalo. First National bought some of the redundant stores spun-off from the Seaway merger, so more consolidation. Giant Eagle bought the Seaway/Fisher Fazio combine which was known as Riser Foods. Ahold mismanaged First National, trying to make it a low price chain (previously it had been a mid-market chain with good perishables---Cleveland was very competitive for perishables and fresh food for decades, which was part of the demise of Kroger and A&P). Basically they took away the service and quality and the stores didn't do well. Giant Eagle bought some, others went to Dave's (a quirky local chain). Giant Eagle continued the wholesale part of Riser/Seaway, but many of the old co-op stores closed and some became Dave's, Marc's, or Discount Drug Mart. So---Giant Eagle in all its mediocrity is the big dog and you still have some robust independents, but they're not the same as the old independents, plus there's also the upscale Heinen's chain which has survived through all of this and is in its 5th generation.