To sum up 2000: The big retailers got even bigger.
With the blockbuster acquisitions of 1999 still being absorbed, most retailers were making relatively smaller regional plays. The big accounts spent more time opening new stores than buying them, a few household retailer names went away, and Wal-Mart kept on coming.
Here are the numbers and a quick run down of the statistics you can bounce your business against. Get extra brownie points by ripping this out and sending it off to your sales veep. Or better yet, memorize these stats and drop them, knowingly, in front of soon-to-be-impressed co-workers.
For the record, the final 2000 store count by trade class: Supermarkets, 31,784 stores; mass merchandisers, 19,239; chain and independent drug stores, 39,690; chain and independent convenience stores, 119,984; wholesale clubs, 832. These numbers are real; I count stores for a living.
Ranked in descending order of volume, the top 10 supermarket accounts (comprising 11,637 stores) are:
1. Kroger (2,366 stores) 2. Albertson’s (1,714) 3. Safeway (1,477) 4. Wal-Mart (886) 5. Ahold (972) 6. Delhaize (1,433) 7. Winn-Dixie (1,081) 8. Publix (648) 9. A&P (553) 10. SuperValu (507 stores they own)
This group accounts for 49 percent of the all-commodity supermarket volume. If you had that percentage of the popular vote, you’d be the president today.
No surprise, the big standout in the rankings is Wal-Mart, now with 867 Supercenter locations and up 30 percent in volume. That moved the chain to number four from number five. Wal-Mart plans to open 300 stores in 2001, 170 to 180 of them Supercenters, 40 discount stores, and 40 to 50 Sam’s Clubs. The company also plans to double its Neighborhood Market grocery/drug hybrids from 17 to 34.
Bye Bye Buy “The theme story of 2000 is not acquisition by mergers, it is acquisition by bankruptcy,” says my colleague, Ed Townsend, director of research at Trade Dimensions. “A few weak, smaller chains have filed for bankruptcy, and the stores have been sold to competitors. This will continue for the next few years.”
Jitney-Jungle couldn’t survive last year. Its stores went to Winn-Dixie, Bruno’s, Fleming, Breaux Mart, Rouse Enterprises, and Albertson’s, while a dozen were closed. C&S Wholesale Grocers acquired Grand Union stores and sold them off as best they could to Ahold Pathmark, Hannaford Brothers, Shaw’s, and Price Chopper. Bradlees closed and Montgomery Ward announced that it had its last Christmas. Pathmark went into and out of bankruptcy.
Meanwhile, to tighten up their markets, Winn-Dixie closed 116 stores and eliminated three divisional offices, and Cub stopped expansion plans for 25 new stores over the next few years.
“Larger and healthier regional chains will continue to merge in an attempt to gain necessary mass to compete against the big guys,” says Townsend.
What a Brand Wants What a brand needs … is more places to sell stuff. Target is planning a rollout of SuperTarget stores that could potentially reach more than 300 locations by the end of the decade. The company opened seven more SuperTargets last year, which brings the total to 30, and plans 30 more per year through 2010. Delhaize opened 85 stores; 75 are Food Lion and 10 are Kash `N Karry. H.E. Butt plans to enter the Houston market with nine full-sized supermarkets in the next year. Costco will enter the Missouri, Texas, Pennsylvania, and New York areas by opening a total of 25 new units.
One of the biggest subplots in retailing was the addition of gas stations in retailer parking lots. Wal-Mart entered into separate regional agreements with Sunoco, Murphy Oil, and Tesoro Petroleum to build hundreds of outlets. Dominick’s plans to open 100 gas stations at its stores over the next four years, and Safeway will add them to several stores in Oregon and Washington.
Take It to the Other Side In an effort to match customer clout, most big-merger activity happened on the manufacturer side. Fueling speculation that coveting thy neighbor’s brand was a new trend, General Mills took over Minneapolis neighbor Pillsbury and Unilever went across the parking lot for Bestfoods. The latter also grabbed Ben & Jerry’s and Slimfast. Kraft took Nabisco – but the mints went to Hershey. ConAgra gobbled International Home Foods. PepsiCo doused the Quaker Oats target flames. And Kellogg nabbed Keebler.
Stayed tuned to the retail changes. But no matter what happens to your customers in the next 11 months, the big accounts will have more longevity than this year’s hits.