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.
D-FW Grocery Landscape: Published July 27 2023
...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.”
This is the second time I've seen this database quoted in a news article and I'm calling BS on this one just like the previous.
All they're doing is multiplying store count by the chain average revenue times chain average grocery percentage to make up a localized revenue total, and then a market total. Then they just do simple division to make up share percentages.
This is a completely misleading way to determine market share.
First, I agree with Walmart being top overall in the DFW market but nowhere near 28%. Second, because they're using chain average volumes the mix of food vs everything else might be very wrong. They have such an extreme density of supercenters in DFW that none of them are intensely busy, certainly nothing like some of the wildly chaotic locations on the West Coast. There's basically one off every freeway off ramp in the DFW metroplex. I'm willing to wager that they each do 40% less than the chain average, maybe worse. So they're wildly inflating Walmart's share.
Second, Kroger has a very mixed group of stores from traditional ten aisle boxes to Costco size megastores. Again hard to imagine that the market nets to chain average.
Third, Target is all over the place and mostly SuperTarget locations. Nearly all are with a supermarket next door as they didn't get the kind of exclusive use leases they have in other areas. They drastically underperform in Texas where Walmart is king. They are SLOW stores. These were some of the last stores to even earn being remodeled out of the 1990's neon decor. They are all very slow compared to Walmart who is usually across the street or around the corner. By using chain average math again Target is probably the most overestimated market share on the chart because of their limited movement of foods. No way in hell they're that high in the market, I would guess these are some of the worst performing foods departments in the Target system as we've seen some locations there remodel with the "de supering" process. I'm pretty sure the market wide remodel project about 7 years ago or so was a last ditch effort to save stores instead of culling 30-40% of their units. Some real dog locations compared to Walmart, off-highway strip mall back corners.
I can see Sam's outperforming Costco here simply because Costco doesn't have enough stores and Sam's are generally in better locations in this market. But again they use chain averages so Costco volume is listed as just a hair behind Sam's despite having half the store count. I believe Costco and Sam's revenues are probably equal per unit here. I think both Sam's and Costco locations outperform chain average here so both shares are under reflected in the total.
I think these articles are crap. I have maybe spent three months total in Dallas for work and even I know enough about the market to see that these articles are wildly skewed. Anyone with Google, a calculator, and a simple Excel file can pretty closely reproduce their "market studies" results. That doesn't mean that they have any basis in fact.
