Wednesday, December 11, 2013

Publix, Safeway, and Marsh Threatened by Dollar General

Wal-Mart, Win-Co, and Aldi today are focused on the consumer and competitive food pricing.  Each has a strong brand value that is driving top line growth and bottom line profits while opening new units.  Win-Co and Aldi each have created a unique non-traditional approach to in-store shopping and product pricing.  Wal-Mart has a more traditional in-store shopping experience.
Win-Co and Aldi are growing fast and capturing new loyal customers.  Grocery retail is about to get a wake-up call.  That call will be unsettling for legacy grocery store chains once solidly planted in the middle and formed the foundation of the industry. 
That wake-up call is from a not so new competitor.  The entrant is Dollar General Stores, targeting price conscious consumers with new fresh food grocery stores.  The Tampa Tribune reported that “The prices on strawberries are great, same with milk. And though the bananas may be on the ripe side for some people’s taste, they’re cheaper than Publix by a significant margin.”
Dollar General has been on the company’s cherry picking CPG products and underpricing the grocery store sector.  They have for years been hurting legacy grocery sector margins and yet growing at a rate 5 times faster than any grocery store the past 10 years.  Having learned that a smaller footprint, lower prices are what consumers want.  Dollar General is poised to garner grocery market share from legacy companies the ilk of Publix, Safeway and Marsh.
To-date Dollar General has only built about 100 of these grocery stores nationwide, and 14 are in Florida. If Dollar General continues up-dating and replacing older stores with these new fresh food grocery stores legacy Wal-Mart may evolve from Low to Middle in food retailing the high end with continue to be fueled by Whole Foods, Wegmans, Trader Joe’s what will happen to the rest of the players? Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche

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