Giant Eagle loses #1 Share in Pittsburgh- Wal Mart now #1

[storewanderer]

Pretty bad- they have three times as many stores in the market as Wal Mart has.

https://www.post-gazette.com/business/m ... 2304090111

This chain is terrible. They run clean, orderly stores. Their pricing is way out of line and their fresh offer is weak at best (it is noticeably better at the Market District Stores though).

No new competitors appear to have entered the market that would cause this type of a market share loss to be even close to justified.

To go from 28.9% share in 2019 to 21.4% share in 2022 is very odd. Most regional grocers did very well during that time period and were at the worst holding share. What in the heck happened with this Giant Eagle chain?

Also worth noting Target picked up 2.9% of market share from 2019-2022. How did they do that? No Super Targets opened and nothing has changed with P-Fresh...

I suspect the entire Giant Eagle operation is in trouble. They are also one of the chains that has implemented a bag fee even in places where there is no bag regulation in place (I believe they are charging a fee for paper bags in these locations; not all locations yet), including their entire convenience store network. Clearly this chain is focused on the wrong things and it shows in their market share losses.

[BatteryMill]

I wonder who could swoop in on Giant Eagle's nest.

[retailfanmitchell019]

Here's to hoping Meijer and Wegmans enter Pittsburgh...

[storewanderer]

Here's to hoping Meijer and Wegmans enter Pittsburgh...

I don't think Wegmans is a good fit but they could throw a few stores in.

Meijer- excellent fit.

Kroger- excellent fit.

Frankly I'd say even Safeway or any Albertsons banner except perhaps Shaws could be a pretty good fit. This is how weak Giant Eagle is.

I can't believe how much share Giant Eagle lost to Wal Mart (and Target). Clearly customers are very unhappy with Giant Eagle to trade down to those two retailers for groceries.

And I doubt Target or Wal Mart have opened a store in the market since 2019 either. Usually when a chain loses the amount of share Giant Eagle has lost it is due to some kind of a shake up like a competitor shows up and opens multiple new stores and starts doing heavy advertising, etc.

Despite this I suspect Giant Eagle is still running with strong profits given their entrenched position.

[buckguy]

The market figures seem to reflect a fairly broad definition of the Pittsburgh area including places like Connelsville and their stores in the immediate area tend toward outer suburbs--they don't have representation in some big suburban retail hubs like Monroeville. The recent uncertainty in the economy would have worked to Wal-Mart's benefit, esp. outside of the immediate Pittsburgh area.

Giant Eagle has only been successful entering other makets when they bought a dominant chain or a sizable footprint, as when they bought Big Bear castoffs in Columbus. Their dominance in Pittsburgh mostly has come because of stumbles by former competitors like Thorofare (once dominant), A&P and Kroger---it's a lot like what happened with Kroger's dominance in Atlanta and Nashville. Giant Eagle is the largest chain in Cleveland, but they also have much stronger local competition there like Dave's (which adapts stores well to local areas) and the upsacle Heinen's chain.

Wegman's would do just fine in yje main Pittsburgh metro, which has a lot of similarities with Buffalo and Rochester which they know well. Also, unlike a lot of places, the well-off parts of Greater Pittsburgh are not concentrated in one or two places, but are in several different areas--high spots in the city or near the Allegheny or Ohio Rivers in the suburbs and in the South Hills. That would set-up Wegmans to have several locations with distinct markets, although the topography might call for smaller stores. I've been to Wegman's in places where they do compete with Giant Eagle, like Erie and they seem to do just fine. The downside for Wegman's would be the lack of sizable secondary makets to round out distribution---the various towns in Pittsburgh's orbit including bigger ones like Johnstown keep losing population or are just treading water and sizable places a bit further a field like Wheeling and Stubenville are in the same boat.

[jdb820]

Hasn't Geagle done everything they could to keep Wegmans and Meijer out, often playing the "non-union chains are bad" card to get their way? Also, in spite of Erie and Frederick, MD existing, weren't there grumbles of a non-compete between the two to keep Geagle from entering NYS?

Also, even though it was nearly 40 years ago wouldn't the 1984 strike that drove Kroger out of Pittsburgh be a strike against them given UFCW's long memory?

[mjhale]

Hasn't Geagle done everything they could to keep Wegmans and Meijer out, often playing the "non-union chains are bad" card to get their way? Also, in spite of Erie and Frederick, MD existing, weren't there grumbles of a non-compete between the two to keep Geagle from entering NYS?

Also, even though it was nearly 40 years ago wouldn't the 1984 strike that drove Kroger out of Pittsburgh be a strike against them given UFCW's long memory?

The Giant Eagle stores in Frederick, MD were acquired from a local operator who had purchased the Martins (Giant-PA) stores that had to be divested when Ahold purchased Giant-MD. My perception is that the two stores do well. The one on 7th Street has been greatly expanded from its original footprint and the US 40 store was relocated to a much larger space. With that said I'm surprised that Giant Eagle hasn't tried to go beyond those two stores. There was an empty former SuperFresh of Ballenger Creek in Frederick and another one in Mount Airy. Giant Eagle could have also gotten the SuperFresh turned Fresh and Greens in Brunswick, MD when it closed. Adding those stores would have made Giant Eagle a significant player in and around Frederick. Then again Giant Eagle had stores in Hagerstown and LaVale (west of Cumberland) that they closed. My thought has always been that they strength of Giant-PA/Martins has kept Giant Eagle from going further east from where they are now in western PA except for their outpost in Frederick, MD.

As for the Kroger strike in 1984, does Pittsburgh have enough long term residents that would remember or even care so many years later about what happened back then? As for the union, if they claimed that a contract from back then was still somehow valid over that area then Kroger could just use a union banner like Safeway or Acme. I would tend towards Acme since they already have stores in PA and there might be some name recognition versus Safeway.

[storewanderer]

I was in one of those Frederick Stores about 4 years ago and it was definitely in pretty good condition and clean. It wasn't very busy. It was the typical Giant Eagle. I was wondering if it was a franchise store but asked and was told it was not. Clean, orderly, unappealing but fresh and full looking perimeter, very high prices, painfully weak sale prices, and not many customers. I left wondering how they stay in business there given the other options.

I see no issue with Kroger using the Kroger banner there. If customers are willing to move from unionized Giant Eagle over the past few years (as this union building thing has been crammed down everyone's throat by certain politicians) to Wal Mart and Target to groceries in mass in that market, I don't think they are much concerned about the union or strikes, especially ones 40 years ago, despite how strong we hear unions supposedly are in PA.

[mjhale]

I was in one of those Frederick Stores about 4 years ago and it was definitely in pretty good condition and clean. It wasn't very busy. It was the typical Giant Eagle. I was wondering if it was a franchise store but asked and was told it was not. Clean, orderly, unappealing but fresh and full looking perimeter, very high prices, painfully weak sale prices, and not many customers. I left wondering how they stay in business there given the other options.

The Giant Eagle on Route 40 seems to do better than the other one off US 15 north of town. The US 40 store only has a smaller but recently remodeled Weis to compete with. Walmart was going to build at the old Frederick Towne Mall site but backed out in 2016. The other Giant Eagle north of town has Weis, Walmart, Giant and Wegmans within one or two exits going north on US 15. If the stores are marginal performers why keep them when they are essentially outposts for Giant Eagle.

I see no issue with Kroger using the Kroger banner there. If customers are willing to move from unionized Giant Eagle over the past few years (as this union building thing has been crammed down everyone's throat by certain politicians) to Wal Mart and Target to groceries in mass in that market, I don't think they are much concerned about the union or strikes, especially ones 40 years ago, despite how strong we hear unions supposedly are in PA.

Unions in PA were much stronger when the railroads and coal mines were in their heyday. Speaking strictly on the grocery side, of the four major grocers in PA, Giant Eagle and Acme are union while Giant-PA and Weis are not. As we all know Giant-PA is a strong competitor so that is possible in the state without being a union shop. Ultimately it is up to the consumer as to where they shop and their reasons for doing so. For whatever reason Pittsburgh has been a Giant Eagle town seemingly since Kroger left and Thorofare fell apart. If I was a competitor looking for a place to expand, perhaps this drop in Giant Eagle's market share is the opening someone would need to grab more market away from them and Walmart. Too bad that there is no Kroger/Albertsons overlap in Pittsburgh. That would be a good place to bring in a new competitor through divested stores.

[storewanderer]

What I wonder is what format would work best for Kroger in Pittsburgh. I am not sure they would have the market knowledge to plunge in there with brand new large format Marketplace Stores. But it could be an interesting experiment to look at some growing/upper middle class type areas and find space to build, say, 3 Marketplace Stores (so they could have enough stores to support at least some limited advertising and help to negotiate with local vendors) and see what would happen...

I think the market is wide open. Someone should give it a shot. Anyone really.