Retail Watchers

DFWRetaileWatcher wrote: ↑September 26th, 2021, 12:07 pm Another takeway I got from this article and the other posts in this thread is that no one really knows what to do with the DFW retail market.

They know they all want in (to be expected, given it's the fastest growing market in the US), but they all seem to struggle with executing a strategy that walks an extremely fine line between capitalizing on its size/growth in a way that's financially sound and not poisoning their brand perception amongst the DFW customer base.

You don't see this issue in other markets as much, for whatever reason.

storewanderer wrote: ↑September 26th, 2021, 12:11 pm

DFWRetaileWatcher wrote: ↑September 26th, 2021, 12:07 pm Another takeway I got from this article and the other posts in this thread is that no one really knows what to do with the DFW retail market.

They know they all want in (to be expected, given it's the fastest growing market in the US), but they all seem to struggle with executing a strategy that walks an extremely fine line between capitalizing on its size/growth in a way that's financially sound and not poisoning their brand perception amongst the DFW customer base.

You don't see this issue in other markets as much, for whatever reason.

Well, Kroger has successfully built share over the years and so has Wal Mart. So it appears those two players, have figured out what to do.

Albertsons clearly has no clue what they are doing. What should be the star format (Market Street) is performing the worst, they are converting stores from a higher volume format (Albertsons) to a lower volume format (Tom Thumb). They probably should try to figure out how to make the Market Street format work for the market, rebrand it, and reinvent the stores into that format. With HEB coming it may be too late.

Also WinCo- looking at that share, you get average weekly volume of just around $1 million a week. WinCo doesn't have pharmacy and has limited GM so I think that is probably pretty close to what they are actually doing in sales. That is not really great volume for WinCo- likely a little bit below average even, but it is probably enough for them to be happy with.

storewanderer wrote: ↑September 26th, 2021, 11:53 am I ignored the fact that Target's share is above Tom Thumb, yet with a lower store count. I am assuming the majority of those are not Super Target locations (but some are). The fact that Target is getting higher share with a lower store count than Tom Thumb, shows just how poorly Tom Thumb is doing.

It is well known and well documented Target's issues moving grocery products.

Back to Market Street again doing the math here it looks like their average weekly volume is $300k. That is awful for what are large modern stores in growth areas. They should be selling $100k+ a week in deli/prepared food alone (probably not even close to happening). Average Albertsons volume is about $600k and average Tom Thumb volume is about $560k. Funny they are converting stores to a less productive banner- Tom Thumb. Bad decision to spend money on expanding that banner. Need to focus efforts on a new format entirely.

Important to note this excludes pharmacy/general merchandise sales. This is another spot where I suspect Market Street is weak, Tom Thumb is weaker (thanks to the Safeway limited GM mix), but Albertsons banner would be much stronger thanks to the expanded drug/GM mix in the stores.

I also like how they break out Wal Mart Neighborhood Market which gets you to an average weekly volume there of $327k a week. Awful performance... but clearly enough volume being shaved off other players to make it worth continuing to operate them. Perhaps they move more drug/GM than average to help those numbers a bit.

pseudo3d wrote: ↑September 26th, 2021, 1:51 am For the Houston and Austin markets, it's clear that Randalls has to go. If they prototyped a new store format similar to H-E-B (something a bit larger with new-builds, and more in-touch with local markets; specifically the ability to fit up or downscale) to replace Randalls, it might work. Retiring the Randalls name in favor of a new brand that can compete more effectively would certainly be interesting.

veteran+ wrote: ↑September 26th, 2021, 1:04 pm Contingent to product mix and square footage of course (payroll, rent, utilities, etc).........................

I find it puzzling by today's price points that any chain would keep a store open that averages less than $750,000. per week.

Depending on the chain and timeline, the companies I worked for would close stores that could not do (after every effort including significant remodel) more than 250k per week, way back when.

BillyGr wrote: ↑September 26th, 2021, 5:56 pm

veteran+ wrote: ↑September 26th, 2021, 1:04 pm Contingent to product mix and square footage of course (payroll, rent, utilities, etc).........................

I find it puzzling by today's price points that any chain would keep a store open that averages less than $750,000. per week.

Depending on the chain and timeline, the companies I worked for would close stores that could not do (after every effort including significant remodel) more than 250k per week, way back when.

The logical one that might fit that would be one in a small(er) area without other stores nearby. In that case, they may be able to work it out, particularly if the store itself is smaller, requiring less people to run and less stock on hand that offsets the lower dollar volume coming in.

In such a situation, there will be some that depend on that store and provide much of the volume, while others just buy a few things and do more major shopping in another area.

...collective grocery spending increased by almost 17% last year to a whopping $28.2 billion and while the population grew again, the increase wasn’t just driven by more mouths to feed. Inflation was the main reason, and it worked to Walmart’s advantage as a perceived low-price retailer.

. . . data compiled by Chain Store Guide that excludes pharmacy and general merchandise sales. When Sam’s Clubs and Neighborhood Markets are added, Walmart’s local share was more than a third, or 37.3% of the region’s spending on groceries last year.

And consumers? They’re back to breaking up their grocery baskets and shopping with multiple retailers again.
. . . Discount grocer Aldi has aggressively campaigned that it could trim a family’s annual grocery bill by $700 a year on average and said nearly 400,000 Texans tried the brand for the first time last year.

“People are more certain of the supply chain and not stocking up as much. They are buying more store-label products for less. They are also breaking up their baskets again.”

Instead of consolidating purchases into one weekly trip, “consumers are back shopping at multiple stores again, with some shopping at premium grocers or clubs like Costco and Sam’s Club for specialty products, fresh produce, and higher quality meat,” he said.

Walmart passed other chains to have the largest grocery market share in D-FW in 2004.

“None of us underestimated Walmart’s expansion during the day, and the traditional grocer had a way to do grocery better with customization, but instead they operated cookie cutters and did things like getting rid of Boar’s Head lunch meats when Safeway took over Tom Thumb (in 1999),” Young said. “Albertsons operated in a time warp zone back then. They weren’t flexible or as fast as the retail market was moving.”

Legacy grocers have taken the hits and learned from them, Young said. The growth of pickup grocery services, grab-and-go prepared meals and fuel programs “combine with the elements of a traditional supermarket to meet the daily needs of customers and make grocery shopping easier and enjoyable.”

SamSpade wrote: ↑August 28th, 2023, 8:32 am The Dallas Morning News has yet again released public data about grocery share (the article is member/subscriber exclusive content), here is some 2022 information.