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SUPER FRESH SLIPS IN FOOD FIGHT Basics moves up; Giant still No. 1

Giant Food Inc. continued its long dominance over the Baltimore-area market in 1992-1993, but upstart Basics and its affiliated Metro Food Markets vaulted past A&P;'s Super Fresh chain to seize second place in the annual Food World ranking of grocers' market shares.

The study by the Columbia-based trade publication showed Giant's market share slipped by an insignificant tenth of a percentage point, from 29 percent to 28.9 percent; its Baltimore-area sales grew by only 0.1 percent despite the addition of a 42nd store in the market.

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Meanwhile, Baltimore consumers gave Metro's "theater of food"

concept a boffo review. The success of the two new stores and one converted Basics gave their parent Super Rite Corp. an 8.6 percent market share, up from 7 percent the previous year. With the two new stores bringing the Harrisburg, Pa.-based company's total in Baltimore to 18, the combined Basics-Metro chain ran up a 25.2 percent sales gain, according to Food World's figures for the 12 months ended March 31.

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The Basics-Metro success was especially significant because it was achieved in a market beset by food price deflation and increasingly rugged competition.

"It wasn't a great year," said Jeff Metzger, Food World publisher.

"It was probably the most dismal year since we've been doing our surveys overall."

No other chain came close to matching the Basics-Metro increase.

Super Fresh, the No. 2 chain in the market since 1989, skidded to third in the supermarket sweepstakes as its market share dropped from 7.3 percent to 7.1 percent at its 26 area stores. Super Fresh's sales slipped 0.1 percent.

Safeway held on to its fourth-place ranking and gained 1 percent in sales despite cutting back from 14 stores to 13. Its market share edged up to 5.7 percent, from 5.5 percent last year. Valu Food, which added one store to reach 13, remained No. 5 as it edged up to 5.2 percent from 4.9 percent.

The sixth- through eighth-place chains all lost market share.

No. 6 Mars Super Markets, which bore the brunt of the increased competition from Metro, saw its sales drop 3.3 percent and its market share erode from 4.8 percent to 4.6 percent, according to Food World's figures.

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Seventh-place Farm Fresh, which closed three of its 15 stores over the course of the year, dropped from a 4.5 percent market share to 3.4 percent as sales plunged 23.3 percent. No. 8 Weis Markets, with seven stores, dropped from a 2.1 percent market share to 1.9 percent as sales fell 7.9 percent.

Rounding out the top 10 were Stop, Shop & Save, a 12-store inner-city specialist that fell from 2.0 percent to 1.9 percent as sales stayed essentially flat. Klein's Super Thrift, a five-store powerhouse in Harford County, barged into the top 10 chains with a 1.6 percent share and a 12.2 percent sales gain, replacing Food Kart.

According to Mr. Metzger, the $4.1 billion Baltimore grocery market is the most fragmented of the eight mid-Atlantic markets Food World tracks. The top 20 sellers of grocery products account for 75 percent of the sales in Baltimore, he said. In most markets that figure is closer to 90 percent.

Food World's combined Baltimore-Washington market share figures, the most closely watched in the industry, showed Landover-based Giant continuing to hold a commanding lead, though Safeway narrowed the gap a little. Giant's market share was 38.8 percent, down from 39.4 percent, while Safeway inched up to 19.1 percent from 18.7 percent.

Shoppers Food Warehouse, a growing force in Washington, moved from 7.8 percent to 8.1 percent, but no other chain scored above 5 percent.

For the first time this year, Food World began tracking nonsupermarket competitors to the grocery chains, including drugstores and warehouse clubs. If nontraditional competitors were included in the Baltimore-area list, only Rite-Aid drugstores would crack the top 10, ranking fourth with $235.5 million in sales.

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But Mr. Metzger said that cumulatively, nontraditional competitors had a heavy impact on the grocery market. In many cases, he said, competition from these sources had forced grocers to cut prices and accept lower margins.

Mr. Metzger offered these capsule assessments of how the top grocery players in the Baltimore market fared in 1992-1993.

GIANT FOOD: "Giant did OK considering what everyone else did in the market," Mr. Metzger said.

Clearly, same-store sales were down slightly, Mr. Metzger said, and only the opening of a new store in Columbia averted an actual decline in dollar sales. Food price inflation played a big role, he said, but the opening of Metro and increased competition along the Liberty Road corridor also had an impact, he said.

Mr. Metzger gave Giant credit for tenaciously protecting its share of a

"mature" market at a time when many competitors are aiming to peel customers away. "They're positioned to come out of this very well," he said.

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Giant's vice president for corporate affairs, Barry F. Scher, said he hadn't seen the figures and couldn't comment on them.

BASICS/METRO: For its performance in 1992-1993 Food World named Basics President John Ryder and his management team as its Retailer of the Year.

"They have zoomed into No. 2," Mr. Metzger said. "This Metro thing has really captivated people in their market area."

Since the three Metro stores in Perry Hall, Eastpoint and Perring Plaza opened to big crowds last year, the company has continued to perform well, Mr. Metzger said. "They've maintained the fundamentals of the store --- cleanliness, excitement, variety, price."

Mr. Metzger also gave the organization credit for keeping the Basics stores running smoothly during the Metro rollout. Mr. Ryder said same-store sales at Basics alone were up 1 percent, a solid performance in a year when many retailers posted declines.

With more Metro stores apparently in the pipeline, Basics/Metro can expect further growth in the current year, Mr. Metzger said.

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SUPER FRESH: This chain's sluggish performance is due more to "minimal support" from Great Atlantic & Pacific Tea Co. corporate headquarters in Montvale, N.J., than a lack of local talent, Mr. Metzger said.

Super Fresh's number of Baltimore stores has been stuck at 26 since at least 1988, according to Food World. "If you're standing still, you're really going backward," Mr. Metzger said.

Michael Rourke, corporate spokesman for A&P;, denied that Super Fresh had slipped from the No. 2 position, saying Food World's figures were inaccurate and Mr. Metzger's analysis was off the mark.

H

SAFEWAY: Mr. Metzger said Safeway has stopped its market

share erosion in the Baltimore market and rebounded with the help of a newer, bigger store in Ellicott City.

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"That was a big home run," he said.

VALU FOOD: This Baltimore-based independent faced difficult competitive pressures in many of its markets but held its own, Mr. Metzger said. The opening of a store in Randallstown offset ** lower same-store sales, he said.

MARS: This family-owned Baltimore chain was most deeply hurt by competition from Metro, with at least 3 stores affected, said Mr. Metzger.

Mars President Angelo D'Anna denied that Metro had that heavy an impact. "One store was affected. That's all," he said.

FARM FRESH: Farm Fresh's decline is part of a planned retrenchment under which it has closed under-performing stores. This is the year they decided to cut back and move forward," Mr. Metzger said.

WEIS MARKETS: According to Mr. Metzger, this Pennsylvania-based chain's stores are high-service but otherwise fail to make a dramatic impression. "It's tough to out-Giant Giant," he said.

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STOP, SHOP & SAVE: The Baltimore-based, minority-owned chain had a "decent" year under difficult conditions, Mr. Metzger said.

KLEIN'S SUPER THRIFT: Owner Ralph Klein had a "good year" as he opened a new store in Riverside that solidified his position as "the king of Harford County," Mr. Metzger said.


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