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Published: Friday, 4/9/2004

Kroger, independents cart away bigger proportion of grocery dollars

BY JON CHAVEZ
BLADE BUSINESS WRITER

Like a chess master moving pieces into position for a final victory, the Kroger Co. has strengthened its stranglehold of the Toledo area grocery market, as two out of every five shoppers locally buy food at the Cincinnati-based chain stores.

Metro area shoppers also filled the void from the shuttered Food Town stores by shopping more at the smaller, independent groceries, according to the latest industry survey.

Kroger and the smaller groceries in Lucas, Wood, and Fulton counties picked up noticeable market share from this time last year, according to Market Scope, a report compiled by TradeDimensions International Inc., of Wilton, Conn.

Kroger, which for years has been the area's No. 1 chain, bumped its lead to 41.8 percent share of food dollars spent locally, up from 35.4 percent a year ago. The independents as a group garnered 20.6 percent of the market in the latest survey, up from 13.8 percent a year ago.

Others, according to TradeDimensions, didn't change much. Meijer Inc. is still No. 2, at 20.1 percent, up from 17.9 percent a year ago; Farmer Jack was 9.9 percent (prior to three of its six local stores closing), compared with 9.7 percent; and Giant Eagle was 2.6 percent, up from 1.7 percent. Food Town a year ago had a 21.5 percent market share, but the entire chain was closed last summer, with Kroger buying and reopening several stores.

Even in the last six months, since the previous TradeDimensions survey, Kroger increased market share while Meijer, Farmer Jack, and Giant Eagle each lost some. In that period, independents such as Churchill's, IGA, Save-A-Lot, Five-Star Markets, SuperValu, and Chief also collectively increased market share.

Jim Sautter, owner of Sautter's Five-Star Market in Sylvania, said the figures sound a bit odd to him.

"I think Kroger has definitely gained, but I don't see Meijer losing any ground and Farmer Jack, well, I thought that might be high to begin with," he said.

"But it wouldn't surprise me if some people who shopped Food Town didn't choose Kroger.

There was a lot of loyalty to Food Town because they were local and I think that's carried over [to shopping at the independents]."

He added: "I know our business has been very solid and we've seen quite a bit of growth over the last two or three years. We are picking up new business and some of it is Food Town's."

Kroger spokesman Gary Huddleston said the chain is pleased with its sales increase in the area.

"We appreciate that they're saying we're No. 1, but the key is customer satisfaction and sales increases, and we are seeing our sales increasing," he said. The stores purchased

he said. The stores purchased from Food Town has helped, he added.

Dave Long, a real estate agent with CB Richard Ellis/Reichle Klein in Maumee, said the local independents might be able to retain their increased share.

"Independents are gaining market share in most metropolitan areas because there's not enough profit dollars for national and regional chains to exist with the number of locations they've had in the past," he said.

Many chains, he said, are either closing unprofitable stores or pulling out of some markets, leaving more opportunities for small independents.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128



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