Friday, October 11, 2013

Fresh Food Competitors Drive Safeway Out of Chicago What City or Region is Next?

Food customer migration is causing the most discontinuity within the restaurant sector today.  However legacy supermarkets that continue to leverage outdated strategy not unlike legacy chain restaurants will not be immune to discontinuity either, if fact they may be unknowing courting it. Make no mistake there is a battle for share of stomach raging within the food space and new leader will emerge while other fail.

Four months ago Safeway announced that they would be selling all of their Canadian stores and exiting the Canadian market. Yesterday this legacy chain with seemingly legacy strategy announced that it will be exiting the Chicago market where they currently operate 72 stores under the name of Dominick’s.

Over the course of the last three years the Chicago market has seen the rapid expansion and success of Mariano’s Fresh Market, Whole Foods, and Trader Joe’s.  All three of these brands focus on Ready-2-Eat and Heat-N-Eat fresh prepared food aka Grocerant Niche products.

Incremental tactical reform will no longer save legacy food retailers in either the grocery or restaurant space.  True structural reform and a renewed focus on Ready-2-Eat and Heat-N-Eat fresh prepared food will be required to ebb consumer migration and discontinuity. 

Retail food CPG space is filled with companies growing and successful the ilk of Dollar Tree which yesterday announced that they opened their 8,000 store. Target and Wal-Mart Stores are having a difficult time competing with the Dollar store sector and neither has the new store growth rate of the Dollar store sector.

We ask once again, is Safeway for sale? Is structural reform possible within legacy retail food companies the ilk of Safeway, Darden or Ruby Tuesdays? Where do you Sell Food? How do you Sell Food? Who are you selling too? Whole Foods, Trader Joe’s, Mariano’s Fresh Market, Pinkies, Jaya The Grocer, and McDonalds are all selling fresh prepared meals and meal components successfully.   Are You?  

When Foodservice Solutions® GrocerantGuru™ Steven Johnson was asked which region Safeway may sell or close next he said “Dallas”. What do you think?   Outside Eyes for Inside Results Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy. Visit: Johnson, or

No comments:

Post a Comment