Grocery chains Giant Food and Safeway dominate food retailing in the Baltimore region, but nontraditional food sellers — convenience stores, drugstores and mass merchants — are grabbing bigger chunks of the market, a supermarket analysis shows.
Little changed in Baltimore's grocery landscape in the past year as a crowded field of retailers meant only a handful of new stores opened and no major players entered the market, according to Columbia-based trade journal Food World, which recently released its annual market study.
"The market is still overstored," said Jeff Metzger, Food World's publisher. "There are a lot of different options in terms of the actual retailers themselves and the style of retailing. … Baltimore is a very competitive, overstored, diverse marketplace, and it's been that way for about a decade now.
"It has created a lot of diversity, which is wonderful for consumers and not so wonderful for the actual retailers," he said.
Giant, the Landover-based unit of Dutch retailer Royal Ahold USA, ranked first among Baltimore-area supermarkets, generating $1.4 billion in sales from 42 area stores and accounting for nearly one-third of the area's $4.25 billion of supermarket sales, Food World reported. The publication uses sales for an April-to-March fiscal year for its ranking.
Safeway maintained the No. 2 slot, with 25 stores and $658 million in sales, while Shoppers Food & Pharmacy came in third with 19 stores and $513 million in sales.
Other top 10 supermarket chains in the Baltimore area included ShopRite, Wegmans, Weis Markets, Food Lion, Mars Super Markets, B. Green & Co. Inc. — a Baltimore food retailer that operates Food Depot and Green Valley stores — and Harris Teeter, all of which made the 2015 top 10 list as well. B. Green moved up a notch thanks to the opening last November of a new Green Valley Marketplace supermarket in Arnold, the second store under that banner.
But nonsupermarket food retailers continue to gain traction. Warehouse clubs, mass discounters, drugstores and convenience stores now account for nearly a third of all Baltimore-area food sales and are cutting into traditional grocers' market share.
Declining sales and intense competition proved too much of a challenge for Rosedale-based Mars, ranked eighth in the Baltimore market. The family-owned chain is selling five of its 13 stores to Weis and preparing to shutter the remaining stores by July 31 after seven decades.
While Giant has dominated the $27 billion grocery market in the Baltimore-Washington region for five years, its market share is slipping, despite its efforts to improve pricing and merchandising, Food World said.
Giant "can't seem to gain enough momentum in a very crowded and diverse field to make a significant difference," Food World said in its report.
Some of the problems have to do with too little labor and not enough training in the stores, Metzger said.
"But perhaps even a larger issue is that the 80-year-old retailer's overall consumer perception has devolved to a one of a very middle-of-the-road operator, an image that's been declining since Ahold purchased the Landover, Md. operator in 1998," he said in the report.
Safeway gained some momentum in the region by sharpening prices and decentralizing leadership, the report said, while Wal-Mart opened new supercenters and climbed to third place.
Giant and Safeway top the combined list of supermarket and other food retailers in the Baltimore area as well, with market shares of 16 percent and 7.6 percent, respectively. Wal-Mart comes in a close third, accounting for 6.9 percent of sales. Other chains on the combined top 10 list include Shoppers, ShopRite, Rite Aid, Wegmans, CVS, Target and Weis Markets.
The study noted that nontraditional food retailers, such as CVS, Costco and Target, continue to carve out significant share while conventional retailers that have been expanding in the Mid-Atlantic, such as Harris Teeter, Wegmans and international food retailers, are growing and having an impact on the perennial market leaders.
Rather than opening new stores at a time when real estate is pricey and hard to come by, food retailers are putting money into remodeling projects or replacing older stores, Metzger said.
The coming year likely will usher in bigger changes, he said, as Weis takes over some of the closed Mars stores and other Mars stores are offered for sale.
In addition, several Baltimore-area Food Lion stores are expected to be sold as part of the pending merger between Giant owner Royal Ahold and rival Delhaize Group of Belgium, parent of low-cost operator Food Lion. Food Lion stores in Edgewater, Elkridge, Eldersburg, Columbia, Owings Mills and Reisterstown will be sold.
And Wegmans is opening a large supermarket this fall to anchor the Foundry Row project in Owings Mills.
Top 10 grocery retailers in the Baltimore region
Ranked by sales from April 2015 to March 2016
1. Giant, $1.41 billion
2. Safeway, $658 million
3. Walmart, $596 million
4. Shoppers, $513 million
5. ShopRite, $360 million
6. Rite Aid, $350 million
7. Wegmans, $330 million
8. CVS, $323 million
9. Target, $303 million
10. Weis Markets, $280 million