"Focus Trends" is a monthly article highlighting a retail category. For more insight listen to our Retail Webinar series on Grocery.
GROCERY EXPANSION & RETRACTION
As the national news stories are devoted to the comings and goings of the major department and apparel stores, the grocery sector is experiencing a burst of interest with hopes that grocers will be the one that can overcome online encroachment. This sector excites communities because grocery stores can drastically improve the quality of life for residents and attract other retailers.
Walmart, Target, and Costco remain the heavy hitters as the big-box grocers, although expansion is moderate. Kroger has recently introduced its Marketplace concept with hopes to compete with them. Walmart and Target have tried smaller concepts, but Walmart Neighborhood Market and the more urban TargetExpress share conservative growth plans.
The national and regional grocery chains – Kroger, Publix, Safeway, Meijer, etc. – continue their moderate, stable growth. These typical grocery stores exist in the middle of the spectrum between the discount grocers and the high-end, specialty stores.
The discount grocers are headlined by Save-A-Lot, Aldi, and Lidl. Save-A-Lot was acquired in 2016 but remains in expansion mode. Aldi is in the midst of upgrading its existing stores to stave off competition from newcomer Lidl. Lidl plans to open its East Coast stores early this year and plans to move west soon.
The specialty grocery stores are in slower-growth or contraction mode. Whole Foods and The Fresh Market have announced closings lately, and Trader Joe’s has only 14 store opening announcements for 2017.
Finally, it’s impossible not to survey a retail sector without knowing what Amazon is doing. Amazon Go is the online superstore’s grocer concept that uses algorithms to stock shelves, technology to remove checkout lines, and only needs a few thousand square feet. The company reported initial hopes to open upwards of 2,000 locations.
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