Despite record sales over the past four months, grocery retailers remain concerned about the welfare of their associates and customers, while also worrying about what lies ahead as sales flatten, restaurants slowly begin to reopen and schools will likely be back in session in the next two months. Above it all, they wonder what further adjustments they will have to make if unemployment levels remain at above 10 percent (it was 13.3 percent in May).
The adjustments made by merchants in all channels during the COVID-19 crisis have already been unprecedented, and even with record revenue attained during the month of March, retailers took little joy in their achievements because of the devastating effects of the pandemic, in which more than 2 million people have tested positive in the U.S. resulting in more than 120,000 deaths.
And in the 42 years that Food Trade News has published its annual retail market study, never has there been a more unusual scenario for retailers. For 11 of the 12 months of our measuring period (April 1, 2019-March 31, 2020) retailers were having a marginally good year when viewed over a five-year period.
Same store sales during the April-February period typically ranged from positive 0.5 percent to 1.5 percent, with partial help coming from slight inflation. Events changed dramatically beginning in early March as the coronavirus started to rapidly spread and most states began issuing “stay at home” mandates. Essential business such as food stores remained open and panic buying quickly ensued. Many retailers said that for a two-week period in mid-March, their sales had more than doubled.
So, what did that do to our numbers? Quite a bit. With schools and restaurants closed, grocery merchants in all channels benefited greatly, both in the physical stores and online. We polled more than 30 retailers in the Mid-Atlantic and Northeast regions, and we believe on average that retailer same store revenue jumped about 40 percent during March. With that gain counted as one-twelfth of their annual sales, we believe that most retailers’ annual revenue gain was between 4 and 5 percent (our survey breaks out each retailer’s volume individually).
After our market study measuring period ended, most retailers continued to enjoy solid same store sales increases, but not nearly at the level of March’s.
Our annual retail market survey measures sales for the 12-month period ended March 31, 2020 and covers a 70-county territory ranging from Litchfield County, CT to Cape May County, NJ on a north-south plane and from New Haven County, CT to Franklin County, PA on an east-west plane.
Here’s the breakout of the top 10 retailers in the Mid-Atlantic market.
For the 35th consecutive year, ShopRite and its sister banners (Price Rite, Fresh Grocer, Gourmet Garage and Dearborn Market) continued to dominate the landscape in the $101.4 billion 70-county region. Over the past 12 months, ShopRite added to its already hefty store base by acquiring a new banner (Gourmet Garage) and adding its 51st member, Nicholas Markets, owned-by the Maniaci family whose four northern New Jersey stores are operating as Fresh Grocers. All told, the Keasbey, NJ-based firm operated 280 stores in the region and amassed estimated sales of $15,780.5 billion.
Aided by a successful remodeling program at 21 of its Long Island stores and the benefits of COVID-related sales in March, Stop & Shop enjoyed its best sales performance in 15 years. Operating the same 212 stores as last year, Stoppie rang up revenue of $8.01 billion, an increase of $138 million over 2019.
CVS retained its leadership among drug chains in the market. The Woonsocket, RI-based drug chain now operates 1,233 units in the market with estimated sales of $6.04 billion.
Ranking fourth among all merchants was The Giant Company, which posted strong comp sales both pre-COVID and during last the 31 days of the measuring period. The Carlisle, PA-based merchant added eight new stores to its roster including four Central PA units that were acquired from independent operators Ferguson & Hassler (one store) and Musser’s Markets (three stores). Sales for the 12 months ending March 31, 2020 were $5.53 billion.
Walmart not only did not open a new store this year, it actually closed two units. Still, comp store revenue was at the top end of the market and the Behemoth continues to add more online sales as it continues to reshape its image. The world’s largest retailer did complete an expansion of its former conventional store in Rio Grande, NJ (Cape May County) to a SuperCenter last year. Walmart now operates 173 stores in the region, ringing up extrapolated sales (food, HBC, GM, pharmacy, floral) of $5.3 billion.
Walgreens (Duane Reade) remained the highest per-store volume leader among all drug chains in the market. And this year, it completed the conversion of the nearly 2,000 stores it acquired from Rite Aid two years ago. That deal manifested in the addition of 125 new stores over the past 12 months, which also significantly elevated the Deerfield, IL drug chain’s revenue. Now operating 813 stores in the $10 billion region, Walgreens produced estimated sales of $5.13 billion.
Seventh-ranked Costco didn’t open any new stores during the last year. But the leading club operator in the country continued to produce huge per store volumes (and strong comps) at its 50 stores. Extrapolated sales are estimated at $4.33 billion.
The leading wholesaler serving Metro New York independent retailers (that is not a co-op), Krasdale, again supplied the most stores in the market (565 – mostly in the five boroughs of New York City). Seven of those banners – C-Town, AIM, Bravo, Fine Fare, Market Fresh, Shop Smart and Shop1 – combined to ring up sales of $4.14 billion for the 12-month measuring period.
Acme Markets, part of the Albertsons family of supermarkets, had a solid year, especially so during March, when COVID-impacted sales were at their height. Under the leadership of Jim “The Hillbilly from Philly” Perkins, the regional chain continued to remodel aging stores. Sales increased for the Malvern, PA-based retailer with revenue reaching $3.37 billion at its 156 stores that covered every state in the 70-county region.
Rounding out the top 10 was Wawa, the dominant c-store player in the market and one that continues to grow despite a changing, more competitive landscape. The Wawa, PA-based privately-held company now operates 524 stores in the Food Trade News region, good for $5.27 billion in annual sales.
Other retailers that topped the $1 billion mark in annual sales in the region included BJ’s, Target, Key Food, Rite Aid (the biggest decliner in the study), Whole Foods, Weis Markets, 7-Eleven, Wegmans, ASG, Allegiance/Foodtown, Aldi and Trader Joe’s.
By class of trade, the leaders are: supermarkets – ShopRite/Price Rite/Fresh Grocer (280 stores, $15.78 billion in estimated annual retail sales); clubs – Costco (50 stores, $4.33 billion in estimated extrapolated sales); mass – Walmart (173 stores, $5.3 billion in estimated extrapolated sales); drug – CVS (1,233 stores and $6.04 billion in estimated sales); and convenience stores – Wawa (524 stores and an $3.27 billion in revenue). Additionally, the region’s eight military commissaries rang up annual sales of $90.8 million, the 10th consecutive year of sales declines.
In non-COVID industry news affecting the 77 multi-store retailers doing business in the $101 billion marketing area, Fairway Market’s second bankruptcy in four years was among the biggest stories. The “like no other market” will soon be “like no market” when it disappears, probably by the end of the year. The auction that followed the filing (held virtually because of COVID) found ShopRite (Village Super Markets) snatching up four Manhattan stores, another unit in Mount Vernon, NY, the parking lot of the Harlem store and Fairway’s perishables distribution center in the Bronx. Those stores continue to operate under the Fairway banner. Last summer, Village became the first ShopRite member to operate stores in Manhattan, when it acquired three-store boutique grocer Gourmet Garage. Other Fairway units were acquired by Amazon which picked off two New Jersey Fairway locations – Paramus and Woodland Park – and plans to convert them into its new grocery store prototype, the first of which is slated to open in Woodland Hills, CA later this summer. Key Food member Seven Seas Associates acquired the Fairway unit on Ralph Avenue in Brooklyn.
And speaking of Brooklyn, the long-awaited Wegmans store at the old Brooklyn Navy Yard in the Red Hook section of that populous borough finally opened in October and sales have been very brisk both pre-COVID and during March (with lots of Instacart activity).
Lidl, which acquired family-owned Best Market in January 2019, converted four of those 24 Long Island stores to its discount banner, with more banner changes expected over the next two years. Another deal announced in January 2019 – Stop & Shop’s purchase of 37 King Kullen stores – has collapsed. Both sides jointly walked away from the agreement citing “significant, unforeseen changes in the marketplace mainly brought on by the COVID-19 outbreak.”
In Central PA, the independent group of retailers known as Family Owned Markets restructured the organization, adding Saubel’s to its roster and naming Hickory, NC-based wholesaler MDI as its primary supplier.
Plus, in a sea change of drug activity, Walgreens (Duane Reade) added 125 new stores, most of them former Rite Aid units it acquired in a deal two years ago.
At the executive level, last July Gordon Reid was promoted to president of Stop & Shop, Ahold Delhaize USA’s (ADUSA) largest operating unit. Additionally, Lee Delaney was named CEO of BJ’s(which went public last year as did discounter Grocery Outlet) as former chief executive Chris Baldwin became executive chairman. Earlier this year, Giant/Martin’s, the large ADUSA bran,d changed its name to The Giant Company. The large retailer will continue to be based in Carlisle, PA and operate under the Giant and Martin’s banners.
Viewed as a group, the 77 chains and independents operating in the grocery, club, mass, drug and c-store channels operated 8,797 stores and accrued $99.47 billion in annual sales, good for 98.09 percent of the region’s $101.3 billion food and drug market.
You can access the complete Food Trade News 2020 Market Study here.