Grocery Wars

By Cathy Jett, The Free Lance-Star, Fredericksburg, Va.

Dec. 15–When it comes to having places to buy groceries, Fredericksburg-area shoppers’ carts are overflowing with choices.

And they’re about to get more.

That helps make this one of the top three most competitive grocery marketplaces in the mid-Atlantic, according to Jeffrey Metzger, editor of the trade magazine Food World. And nontraditional grocery stores are getting into the game.

“No. 1, you have Wal–Mart Supercenters, which makes the pencil a little sharper for everyone,” he said in a recent phone interview from his Columbia, Md., office.

Wal–Mart came in third in Food World’s 2005 market-share study for this region, with nearly $130 million in sales. That was about half of top dog Food Lion’s total sales from April 1, 2004, to March 31, 2005, and about $30 million less than runner-up Giant’s over the same period.

But those figures could look much different in the next few years.

The Wal–Mart Supercenter in Southpoint II, for example, didn’t open until last summer. So the discount giant’s total take locally will likely be higher by 2006.

Target plans to open a SuperTarget, which will have a full-scale grocery, in the Cosner’s Corner retail development next July. And Giant will open its sixth area store by next winter in the Commercial Center at Celebrate Virginia North on U.S. 17 in Stafford County.

The area also has two Shopper’s Food Warehouse stores and two warehouse clubs, Costco and BJ’s Wholesale Club. And then there’s the growing trend for drugstores, dollar stores and even home-improvement stores such as Home Depot and Lowe’s to carry grocery staples.

“Fredericksburg is clearly a market that most retailers see as ‘overstored’ now,” Metzger said. “It’s going to be even more ‘overstored’ then.” To stay in the game, stores need to carve out a niche and differentiate themselves, he said.

Food Lion, which faces stiff competition from both Giant and Wal–Mart, will try to do just that by renovating its 25 area stores next year. It’s part of an overhaul of all 80 Food Lions in the Washington metro market, said spokesman Jeffrey Lowrance.

“This approach gives Food Lion the opportunity to make a market-wide impact and give our stores a consistent look and feel across the market,” he said.

The remodeling will focus primarily on such areas as the produce, meat and deli departments, and will include new décor, graphics and lighting, according to Lowrance.

Food Lion also has expanded its natural and organic product offerings; added more convenience foods or “home meal solutions”; and inked a deal to sell fresh, filled pastas from Bertagni in 400 of its stores. Bertagni, an Italian company, is the world’s oldest manufacturer of tortellini.

“Our customers are changing continuously,” Lowrance said. “At one time, this was a traditional Southern market. Now we have a growing diversity, and people’s tastes in foods are evolving and changing.” Food Lion is likely to be hit the hardest by Wal–Mart’s expansion into the Fredericksburg area, Metzger said, because the chains appeal to the same demographic.

Shopping at a Food Lion, however, is much different from going to a supercenter, Lowrance said.

“We’re typically in smaller shopping centers, and our stores are 30,000 to 40,000 square feet,” he said. “It’s a space that shoppers can get from one end to the other fairly quickly, and be on their way. We also continue to concentrate primarily on food. Food Lions don’t offer a lot of general merchandise.”

Giant also is trying to hold on to its existing customers and gain new ones here. It is eyeing the Fredericksburg area for additional new locations besides the 60,000-square-foot one in Celebrate Virginia. And it may remodel some of its existing stores, said spokesman Barry Scher.

“Our stores are doing great,” he said. “More and more people continue to move to the area because of road and rail and commuter bus improvements.” Like Food Lion, it has expanded its natural and organic food lines, as well as its produce and deli departments. The chain also has partnered with Staples to add office supplies in some stores, and is remodeling some pharmacies to look more like drugstores.

“Our sister company, Stop and Shop, is also using this ‘store-within-a-store concept,” Scher said. “It has helped increase sales.” Other area stores also are trying different approaches. Shoppers Food Warehouse, for example, has probably done the best job of appealing to ethnic consumers, Food World’s Metzger said. Not only do its regular stores have an extensive selection of ethnic foods, but it converted one of its Manassas stores into an Hispanic grocery last year.

Ethnic groceries such as the Fiesta Super Market that recently opened in Olde Greenwich Shopping Center on Lafayette Boulevard are “a growing factor,” according to Metzger.

“It is a prime opportunity if you know what you’re doing,” he said.

As busy as Fredericksburg’s grocery scene may be, there is one chain that doesn’t plan to make an appearance any time soon. That’s Trader Joe’s, which readers have repeatedly told The Free Lance–Star is at the top of their wish list for this area.

“At this time, it’s not in our two-year prescription to be in the Fredericksburg area,” said spokeswoman Alison Mochizuki. “But it is nice to be wanted.”

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