Why aren't there national grocery chains?
September 9, 2009 10:44 AM Subscribe
Why aren't there any national grocery chains in America? They all seem to be regional.
A lack of nation-wide branding is not the same as a lack of nation-wide ownership & operational control.
posted by GuyZero at 10:50 AM on September 9, 2009 [3 favorites]
posted by GuyZero at 10:50 AM on September 9, 2009 [3 favorites]
I've shopped at Safeways in California and Washington DC, so maybe there are.
Walmart ranks number one, though, and while that depends on your definition of grocery chain ... they're everywhere.
posted by Comrade_robot at 10:50 AM on September 9, 2009
Walmart ranks number one, though, and while that depends on your definition of grocery chain ... they're everywhere.
posted by Comrade_robot at 10:50 AM on September 9, 2009
There are national ones, like Whole Foods, Trader Joe's, and the big-box stores; there are also a bunch that operate different brands in different areas, but are single large companies, like SuperValu.
posted by Tomorrowful at 10:51 AM on September 9, 2009
posted by Tomorrowful at 10:51 AM on September 9, 2009
What in the world is Wikipedia's definition of "national"? There are no Aldis, Piggly Wigglys, or Delhaize Group stores in Oregon. Also, Trader Joe's appears to be in about 21 states. How is that national?
posted by peep at 10:53 AM on September 9, 2009 [1 favorite]
posted by peep at 10:53 AM on September 9, 2009 [1 favorite]
Kroger operates under a bunch of different names. For example, they are Fry's in Arizona, City Market in Colorado, and they have others. A shopper's club card at one will work at all.
posted by azpenguin at 10:56 AM on September 9, 2009
posted by azpenguin at 10:56 AM on September 9, 2009
The reason for the persistence of regional grocery brands in the US, even when operated by the same chain, is said to be consumer loyalty. Conventional wisdom in the food and advertising industries is that shoppers have strong attachments to their local brand and would resent any attempt to rebrand.
posted by Sidhedevil at 10:57 AM on September 9, 2009
posted by Sidhedevil at 10:57 AM on September 9, 2009
Most (perhaps all) of those listed on the link provided by halogen were originally local/regional chains. Then they were bought up by SuperValu, Safeway, etc. and combined under a national umbrella.
I can speculate that transportation and distribution issues just made it too difficult for any one company to establish a national chain until recently. By the time those problems were largely solved, regional chains were already well entrenched and it was simply much easier to create a national presence by buying up existing chains.
With the exception of Piggly Wiggly (which is an outlier in many ways), all of the national chains had some shtick that set them apart from the competition: Walmart, Sears, and Target already had a presence and distribution channels for their department/discount stores, Aldi established itself as a super-cheap/European style store, Costco is a warehouse club, and Whole Foods ... well, we all know about Whole Foods.
posted by DrGail at 10:58 AM on September 9, 2009
I can speculate that transportation and distribution issues just made it too difficult for any one company to establish a national chain until recently. By the time those problems were largely solved, regional chains were already well entrenched and it was simply much easier to create a national presence by buying up existing chains.
With the exception of Piggly Wiggly (which is an outlier in many ways), all of the national chains had some shtick that set them apart from the competition: Walmart, Sears, and Target already had a presence and distribution channels for their department/discount stores, Aldi established itself as a super-cheap/European style store, Costco is a warehouse club, and Whole Foods ... well, we all know about Whole Foods.
posted by DrGail at 10:58 AM on September 9, 2009
At one time, there was the A&P, which was fairly ubiquitous across the country.
posted by Thorzdad at 11:04 AM on September 9, 2009
posted by Thorzdad at 11:04 AM on September 9, 2009
The Atlantic & Pacific Tea Company often referred to as A&P.
posted by JohnnyGunn at 11:17 AM on September 9, 2009
posted by JohnnyGunn at 11:17 AM on September 9, 2009
Kroger operates under a bunch of different names. For example, they are Fry's in Arizona, City Market in Colorado, and they have others. A shopper's club card at one will work at all.
Yep, I use my King Sooper's member card at King Sooper's in Colorado, Dillon's in Kansas and Price Chopper and Kroger in Missouri. One of the house brands that all these stores stock is "Kroger Foods".
posted by Science! at 11:18 AM on September 9, 2009
Yep, I use my King Sooper's member card at King Sooper's in Colorado, Dillon's in Kansas and Price Chopper and Kroger in Missouri. One of the house brands that all these stores stock is "Kroger Foods".
posted by Science! at 11:18 AM on September 9, 2009
It is interesting that there are no general purpose supermarket chains as universal as Best Buy or Barnes and Noble. Walmart and Target are primarily department stores and Whole Foods and Trader Joes are mostly only in big urban areas. I think that the local loyalty factor is a big one. The local Giant Eagle chain has a iron grip (tallon?) on the Western PA market where I live, to the point where "Giant Eagle" is synonymous with "Supermarket" for a lot of people here. There's one or more in every neighborhood and town in the area and it would be hard for a Piggly Wiggly or Safeway to break in.
posted by octothorpe at 11:18 AM on September 9, 2009
posted by octothorpe at 11:18 AM on September 9, 2009
At one time, there was the A&P, which was fairly ubiquitous across the country.
Both A&P and IGA had thousands and thousands of stores in many US states in the 20th century.
A&P still exists as a corporate entity: it operates about 500 stores as A&P, Waldbaum's, Pathmark, and Food Emporium. IGA (which is an alliance rather than a chain per se) still has about 1000 stores.
posted by Sidhedevil at 11:19 AM on September 9, 2009
Both A&P and IGA had thousands and thousands of stores in many US states in the 20th century.
A&P still exists as a corporate entity: it operates about 500 stores as A&P, Waldbaum's, Pathmark, and Food Emporium. IGA (which is an alliance rather than a chain per se) still has about 1000 stores.
posted by Sidhedevil at 11:19 AM on September 9, 2009
Have you ever thought of how supermarkets in general get their products? There is a middle layer between the manufacturers (Kellogs, Coke, Jimmy Deans, etc.) and the Supermarkets (A&P, Grand Union, Piggily Wiggily). These are called wholesale grocers. Back in the 1990s I used to work for the largest in New England called C&S Wholesale Grocers. I was absolutely penniless and worked as a dispatch clerk for a few months, basically compiling the paperwork that the truckers would take out to the supermarkets each day.
These wholesale grocers are monstrous warehouses with 3 story freezers and trucks going in and out 24 hours a day , but even they have their limits both on an organizational and administrative level.
The amount of food that gets shipped every single day is mind-boggling and supermarkets have to pay for it. The answers above regarding corporation structures are valid, but my guess is that the traditional regional differences are there for a reason, you would need to have tremendous financial resources to be able to keep up with your expenses if you were a national chain
posted by jeremias at 11:22 AM on September 9, 2009
These wholesale grocers are monstrous warehouses with 3 story freezers and trucks going in and out 24 hours a day , but even they have their limits both on an organizational and administrative level.
The amount of food that gets shipped every single day is mind-boggling and supermarkets have to pay for it. The answers above regarding corporation structures are valid, but my guess is that the traditional regional differences are there for a reason, you would need to have tremendous financial resources to be able to keep up with your expenses if you were a national chain
posted by jeremias at 11:22 AM on September 9, 2009
Giant is not part of Kroger.
Royal Ahold (no, not you, the supermarket conglomerate)
posted by Pollomacho at 11:24 AM on September 9, 2009
Royal Ahold (no, not you, the supermarket conglomerate)
posted by Pollomacho at 11:24 AM on September 9, 2009
It's evolutionary. Both Best Buy and B&N started after the point when it was easy to build a nation-wide distribution chain and both benefited from the shift to suburban big-box stores which were cheaper top operate vs malls and carried more inventory vs mom & pop stores. They also tapped into a desire that was present nationally but was only viable in select local markets previously - you had big bookstores in university towns (Boston comes to mind, Toronto's "world's biggest bookstore" which wasn't all that big) and you had Fry's in areas like CA and TX where there were a lot of geeks building things. Once upon a time electronics, appliance and book stores were as local as the local deli or bakery. Because they're selling non-perishable items though it was much, much easier to warehouse and distribute them.
Grocery stores are as old as dirt (well, ok, the 40's) and as such staked their claim before people started doing unified nationwide retail distribution & branding. Note that the nationwide brands named here, Trader Joes, Whole Foods and Costco, are both relative newcomers that specialize in niche products. Target and Walmart are dry-goods retailers that expanded into groceries, though in the case of Target it's primarily shelf-stable stuff that can be treated like a CD or soccer ball in terms of handling and distribution. Wal-mart's move into fresh groceries is flat-out expansion which is very capital-intensive, something that they alone have the financial ability to do on such a large scale. Groery stores can be profitable, but they're not runnign the show the way Wal-Mart does.
For whatever reason, this never really happened the same way in Canada - we've had nationwide grocery chains as long as I can remember, although they may be more regional that I realize as I didn't buy a lot of groceries until the mid-90's and I haven't lived everywhere.
posted by GuyZero at 11:27 AM on September 9, 2009 [2 favorites]
Grocery stores are as old as dirt (well, ok, the 40's) and as such staked their claim before people started doing unified nationwide retail distribution & branding. Note that the nationwide brands named here, Trader Joes, Whole Foods and Costco, are both relative newcomers that specialize in niche products. Target and Walmart are dry-goods retailers that expanded into groceries, though in the case of Target it's primarily shelf-stable stuff that can be treated like a CD or soccer ball in terms of handling and distribution. Wal-mart's move into fresh groceries is flat-out expansion which is very capital-intensive, something that they alone have the financial ability to do on such a large scale. Groery stores can be profitable, but they're not runnign the show the way Wal-Mart does.
For whatever reason, this never really happened the same way in Canada - we've had nationwide grocery chains as long as I can remember, although they may be more regional that I realize as I didn't buy a lot of groceries until the mid-90's and I haven't lived everywhere.
posted by GuyZero at 11:27 AM on September 9, 2009 [2 favorites]
Ah, Royal Ahold. I think I visited their US HQ once in the process of selling them some piece of enterprise software. It was really hard to not keep asking "Your company is called what now?" over and over again.
posted by GuyZero at 11:30 AM on September 9, 2009
posted by GuyZero at 11:30 AM on September 9, 2009
A lot of these national brands formed by merger. Fred Meyers in the northwest was independent (the first store, run by Fred hisself, was in downtown Portland) but was eventually purchased by Krogers.
But they kept the Fred Meyers name because it's familiar. No good reason to change it, in fact.
This kind of thing is really common. My favorite mayo is Best Foods. When I moved to MA, I was worried that I wouldn't be able to get it. And I couldn't find it in the stores. But there was something called Hellman's which looked a lot alike, so I tried that and it tasted just the same. Eventually I looked at the fine print and saw that Hellman's and Best Foods are the same brand. It's just that in different parts of the country people are used to different names, and the company sees no advantage in bucking that.
posted by Chocolate Pickle at 11:38 AM on September 9, 2009
But they kept the Fred Meyers name because it's familiar. No good reason to change it, in fact.
This kind of thing is really common. My favorite mayo is Best Foods. When I moved to MA, I was worried that I wouldn't be able to get it. And I couldn't find it in the stores. But there was something called Hellman's which looked a lot alike, so I tried that and it tasted just the same. Eventually I looked at the fine print and saw that Hellman's and Best Foods are the same brand. It's just that in different parts of the country people are used to different names, and the company sees no advantage in bucking that.
posted by Chocolate Pickle at 11:38 AM on September 9, 2009
Grocery stores are as old as dirt (well, ok, the 40's) and as such staked their claim before people started doing unified nationwide retail distribution & branding.
That's not accurate in the case of the US. A&P and IGA were doing national branding in the late 1920s.
posted by Sidhedevil at 11:42 AM on September 9, 2009
That's not accurate in the case of the US. A&P and IGA were doing national branding in the late 1920s.
posted by Sidhedevil at 11:42 AM on September 9, 2009
You are correct, sir. According to Wikipedia they faltered in the 70's and exited a number of markets. I wonder what happened. The wikipedia article just says "competition from regional grocers" but I wonder what the underlying changes were that gave those new entrants an edge.
So, anyway, there's A&P historically, there'skroger since the 80's and others as mentioned.
posted by GuyZero at 11:49 AM on September 9, 2009
So, anyway, there's A&P historically, there'skroger since the 80's and others as mentioned.
posted by GuyZero at 11:49 AM on September 9, 2009
Eventually I looked at the fine print and saw that Hellman's and Best Foods are the same brand.
Coming from the east coast, when I learned about Best I was shocked, and eventually I had an epiphany about how good the Hellman's ad campaign was. They played a nice little song that said, "Bring out the Hellman's and bring out the best". Get it? "the best" could also be "the Best". That had to be intentional, right? A dog whistle that doesn't say anything to all the people who think Hellman's is just Hellman's, but if you are from somewhere where Best mayonnaise is where it's at, you are comforted. Because Hellman's is both best and Best.
Bad version at the end of this commercial.
posted by dirtdirt at 11:49 AM on September 9, 2009
Coming from the east coast, when I learned about Best I was shocked, and eventually I had an epiphany about how good the Hellman's ad campaign was. They played a nice little song that said, "Bring out the Hellman's and bring out the best". Get it? "the best" could also be "the Best". That had to be intentional, right? A dog whistle that doesn't say anything to all the people who think Hellman's is just Hellman's, but if you are from somewhere where Best mayonnaise is where it's at, you are comforted. Because Hellman's is both best and Best.
Bad version at the end of this commercial.
posted by dirtdirt at 11:49 AM on September 9, 2009
I can speculate that transportation and distribution issues just made it too difficult for any one company to establish a national chain until recently.
And perhaps still now, given the parts of the US with a single "big fish in small pond" regional chains. In western NC, Ingles is the dominant chain, but it's barely known outside the 250-mile radius from its distribution warehouse in which all of its stores operate. The closer you get to its base, the higher its market share, and competitors have been closing stores while Ingles opens new ones. There are niche markets -- Harris Teeter for upscale areas, outlets and discounters and low-enders like Aldi for bargain-seekers -- but one local behemoth.
posted by holgate at 11:55 AM on September 9, 2009
And perhaps still now, given the parts of the US with a single "big fish in small pond" regional chains. In western NC, Ingles is the dominant chain, but it's barely known outside the 250-mile radius from its distribution warehouse in which all of its stores operate. The closer you get to its base, the higher its market share, and competitors have been closing stores while Ingles opens new ones. There are niche markets -- Harris Teeter for upscale areas, outlets and discounters and low-enders like Aldi for bargain-seekers -- but one local behemoth.
posted by holgate at 11:55 AM on September 9, 2009
Kroger is national. It operates under lots of names,
There is no Kroger or affiliate in the NE- so it is not "national".
posted by Zambrano at 11:59 AM on September 9, 2009
There is no Kroger or affiliate in the NE- so it is not "national".
posted by Zambrano at 11:59 AM on September 9, 2009
Kroger is national. It operates under lots of names, including Ralph's, Giant, Smith's, Food 4 Less and many others (including "Kroger").
I've never heard of any of these in NY. We have A&P, Key Food, Food Emporium, Associated, Whole Foods, Trader Joe... And of that list of "national chains" on wiki, the only one I have even heard of is Shop 'n Save.
posted by mdn at 12:01 PM on September 9, 2009
I've never heard of any of these in NY. We have A&P, Key Food, Food Emporium, Associated, Whole Foods, Trader Joe... And of that list of "national chains" on wiki, the only one I have even heard of is Shop 'n Save.
posted by mdn at 12:01 PM on September 9, 2009
The United States is too big for national grocery chains. Or something.
posted by elsietheeel at 12:02 PM on September 9, 2009
posted by elsietheeel at 12:02 PM on September 9, 2009
Maybe the problem here is with the term "national." Some people seem to be thinking that "national" means that it has a recognizable presence in all 50 states and all territories and protectorates. That is not, though, what I interpret "national" to mean.
That's a good point - how do you interpret "national"? Kroger (or any of its other brands) does not appear to have much of a presence in the Northeast...
posted by bahama mama at 12:22 PM on September 9, 2009
That's a good point - how do you interpret "national"? Kroger (or any of its other brands) does not appear to have much of a presence in the Northeast...
posted by bahama mama at 12:22 PM on September 9, 2009
Response by poster: Maybe the problem here is with the term "national." Some people seem to be thinking that "national" means that it has a recognizable presence in all 50 states and all territories and protectorates. That is not, though, what I interpret "national" to mean.
I should have made this more explicit in the question. What I meant was, and what many people have interpreted it to be is, in nearly any major city in America, you can go to a WalMart, a Burger King, a Starbucks, a Footlocker, a Best Buy, and a 7/11. (I'm sure there are exceptions, but they are few and far between.) If you can go to a standard place to get general goods, fast food, coffee, shoes, electronics, and prepackaged foods, why isn't there a standard for groceries? People seem to be pointing toward brand loyalty, but if that's the case, why are people more loyal toward groceries than say, their local coffee shop?
I had always assumed it was some issue with shipping/farming, not just brand loyalty, but I was never able to find anything about it.
posted by Damn That Television at 12:23 PM on September 9, 2009
I should have made this more explicit in the question. What I meant was, and what many people have interpreted it to be is, in nearly any major city in America, you can go to a WalMart, a Burger King, a Starbucks, a Footlocker, a Best Buy, and a 7/11. (I'm sure there are exceptions, but they are few and far between.) If you can go to a standard place to get general goods, fast food, coffee, shoes, electronics, and prepackaged foods, why isn't there a standard for groceries? People seem to be pointing toward brand loyalty, but if that's the case, why are people more loyal toward groceries than say, their local coffee shop?
I had always assumed it was some issue with shipping/farming, not just brand loyalty, but I was never able to find anything about it.
posted by Damn That Television at 12:23 PM on September 9, 2009
re dirtdirt's comment:
They played a nice little song that said, "Bring out the Hellman's and bring out the best".
In my experience, you have that story backwards. When I was a kid in Arizona (that was a long time ago), we had Best Foods mayo, and the song said "Bring out the Best Foods and bring out the best", which made a cute play on words. When I moved farther east and heard the word Hellman's in that song, I understood that it was the same product with a different brand name, but to me the new version of the song didn't make any sense. I never tried to make it have a double meaning, because I already knew about the "original".
(Disclaimer - I have no idea which one was the first and/or right version of the song.)
posted by CathyG at 12:48 PM on September 9, 2009
They played a nice little song that said, "Bring out the Hellman's and bring out the best".
In my experience, you have that story backwards. When I was a kid in Arizona (that was a long time ago), we had Best Foods mayo, and the song said "Bring out the Best Foods and bring out the best", which made a cute play on words. When I moved farther east and heard the word Hellman's in that song, I understood that it was the same product with a different brand name, but to me the new version of the song didn't make any sense. I never tried to make it have a double meaning, because I already knew about the "original".
(Disclaimer - I have no idea which one was the first and/or right version of the song.)
posted by CathyG at 12:48 PM on September 9, 2009
Ah, Royal Ahold... It was really hard to not keep asking "Your company is called what now?" over and over again.
Yeah, it makes you understand why H E Butt changed their name to HEB Foods.
posted by soelo at 1:06 PM on September 9, 2009
Yeah, it makes you understand why H E Butt changed their name to HEB Foods.
posted by soelo at 1:06 PM on September 9, 2009
What I meant was... in nearly any major city in America, you can go to a WalMart, a Burger King, a Starbucks, a Footlocker, a Best Buy, and a 7/11. ... If you can go to a standard place to get general goods, fast food, coffee, shoes, electronics, and prepackaged foods, why isn't there a standard for groceries?
My guess would be that there has been too much competition and not enough specialization for this to happen, and that it is now happening with Whole Foods & Trader Joe's. Remember that Starbucks has only been a national brand for a decade or two; before that people were fine with relying on their local coffee shops. What Starbucks did, and then other stores after them, was alter the market - it made cappuccino a mass market drink.
An ordinary grocery store opening just anywhere is going to have big risks - there will certainly be other grocery stores already there, since people already know about food, so they have to offer something that the local stores don't. 7-11 offered late hours. Burger King offered fast food. Starbucks offered cappuccino. These things were not previously available.
Whole Foods is offering gourmet and organic foods - we'll see if it takes. An ordinary grocery store opening in a location where they already have ordinary grocery stores is very hit or miss. Why should they succeed?
posted by mdn at 1:12 PM on September 9, 2009
My guess would be that there has been too much competition and not enough specialization for this to happen, and that it is now happening with Whole Foods & Trader Joe's. Remember that Starbucks has only been a national brand for a decade or two; before that people were fine with relying on their local coffee shops. What Starbucks did, and then other stores after them, was alter the market - it made cappuccino a mass market drink.
An ordinary grocery store opening just anywhere is going to have big risks - there will certainly be other grocery stores already there, since people already know about food, so they have to offer something that the local stores don't. 7-11 offered late hours. Burger King offered fast food. Starbucks offered cappuccino. These things were not previously available.
Whole Foods is offering gourmet and organic foods - we'll see if it takes. An ordinary grocery store opening in a location where they already have ordinary grocery stores is very hit or miss. Why should they succeed?
posted by mdn at 1:12 PM on September 9, 2009
Best answer: I had always assumed it was some issue with shipping/farming, not just brand loyalty, but I was never able to find anything about it.
It's not a distribution issue, as we can see from chains that include very distinct brands, like Royal Ahold's Stop and Shop/Giant Food, Supervalu's Acme/Albertsons/Jewel/Lucky/Shaw's/Star Market, Kroger's Kroger's/Ralph's/Smith's/Dillons, etc.
It really is the product of strong beliefs within the industry about shopper loyalty--if you look at the trade mags like Supermarket Today and Progressive Grocer, you will see the conventional wisdom repeated with every acquisition. You can see it in this press release from Supervalu about its 2006 acquisition of Albertsons:
"By adding prestigious supermarket nameplates across the country, each with strong market presence in their respective regions, we will have the critical mass and footprint to leverage the combined operations to become a more profitable business," said Supervalu CEO Jeff Noddle said in a statement. "This acquisition is a strategic fit with Supervalu's approach of operating a diversified portfolio of regional banners—locally managed and branded—with strong prevailing market shares."
posted by Sidhedevil at 1:28 PM on September 9, 2009
It's not a distribution issue, as we can see from chains that include very distinct brands, like Royal Ahold's Stop and Shop/Giant Food, Supervalu's Acme/Albertsons/Jewel/Lucky/Shaw's/Star Market, Kroger's Kroger's/Ralph's/Smith's/Dillons, etc.
It really is the product of strong beliefs within the industry about shopper loyalty--if you look at the trade mags like Supermarket Today and Progressive Grocer, you will see the conventional wisdom repeated with every acquisition. You can see it in this press release from Supervalu about its 2006 acquisition of Albertsons:
"By adding prestigious supermarket nameplates across the country, each with strong market presence in their respective regions, we will have the critical mass and footprint to leverage the combined operations to become a more profitable business," said Supervalu CEO Jeff Noddle said in a statement. "This acquisition is a strategic fit with Supervalu's approach of operating a diversified portfolio of regional banners—locally managed and branded—with strong prevailing market shares."
posted by Sidhedevil at 1:28 PM on September 9, 2009
Response by poster: Good answer! I'd love to see why the grocery industry thinks/believes/has evidence that shopper loyalty is so great in the grocery market.
posted by Damn That Television at 1:38 PM on September 9, 2009
posted by Damn That Television at 1:38 PM on September 9, 2009
Well, ask the folks in this thread about their grocery loyalty? I live in Nothern California and I used to shop exclusively at Raleys/Bel Air. Why? Because my mom did. My mom also refuses to set foot into a Safeway. Why? Because she's still bitter about the Alhambra Theater.
I no longer exclusively shop at Raley's because I can get most of my shopping done at Trader Joe's.
posted by elsietheeel at 1:46 PM on September 9, 2009
I no longer exclusively shop at Raley's because I can get most of my shopping done at Trader Joe's.
posted by elsietheeel at 1:46 PM on September 9, 2009
why the grocery industry thinks/believes/has evidence that shopper loyalty is so great in the grocery market
It's also true of certain department stores, cf. the teeth-gnashing response in Chicago to Marshall Field's being bought out by Macy's.
posted by kittyprecious at 2:15 PM on September 9, 2009
It's also true of certain department stores, cf. the teeth-gnashing response in Chicago to Marshall Field's being bought out by Macy's.
posted by kittyprecious at 2:15 PM on September 9, 2009
It's not just cosmetic, either. Fred Meyers is a general retailer; groceries are a big part of their business but they also sell electronics, gardening stuff, clothes, automotive, tools, and even some furniture.
Ralph's is also a Kroger brand, but all they sell is groceries.
posted by Chocolate Pickle at 2:15 PM on September 9, 2009
Ralph's is also a Kroger brand, but all they sell is groceries.
posted by Chocolate Pickle at 2:15 PM on September 9, 2009
It's worth noting that some of these big chains expanded and shrank and expanded again with changing business fortunes. Safeway, IIRC, had a presence under that name in parts of Southern California. When the company was downsizing in the 80s these stores became part of Vons, which was later absorbed back into Safeway, although the stores are still called Vons.
I call the local version (Randall's) where I now live "Safeway Incognito."
posted by Robert Angelo at 3:42 PM on September 9, 2009
I call the local version (Randall's) where I now live "Safeway Incognito."
posted by Robert Angelo at 3:42 PM on September 9, 2009
n my neighborhood, there are two supermarkets -- a Safeway and a Lucky. The Lucky's (everybody says Lucky's, even though it's officially Lucky) changed its name to Albertsons a while back, and people were very slow to refer to it by its new name. About a year ago, just about the time people started saying Albertsons, they changed their name back to Lucky -- so now there are people calling the same store with its new old name by its old new name. The Safeway has always been Safeway.
One of the local drug stores is having similar issues. It used to be a Pay Less, then it switched to Rite Aid, now it's either a CVS (or a Walgreens; I really can't remember. Maybe it was the Longs, nee Thrifty, across the street that's now Walgreens.)
posted by clorox at 4:40 PM on September 9, 2009
One of the local drug stores is having similar issues. It used to be a Pay Less, then it switched to Rite Aid, now it's either a CVS (or a Walgreens; I really can't remember. Maybe it was the Longs, nee Thrifty, across the street that's now Walgreens.)
posted by clorox at 4:40 PM on September 9, 2009
Best answer: I believe the answer lies not only in consumer loyalty, but also in the vagaries of how distribution is obtained, the cutthroat nature of the grocery business, real estate, and timing.
There are certain companies known in the grocery industry as "national chains" - though they may not be what some here would consider national (not having stores in all 50 states). These are the Krogers, the Safeways, the Supervalus, as you'll find on _Progressive Grocer's_ Top 50 list here (PDF) and _Supermarket News'_ top 75 list that Comrade_robot linked above. Most of them operate under a variety of banners (store names) in different markets.
How did these national chains come about? Robert Angelo noted above that chains "expanded and shrank and expanded again with changing business fortunes." They buy and divest, trading banners and regions among themselves. This has been going on, to a progressively greater level of consolidation, for a century or so. If you look at a lot of grocery chain stores' websites, you will often find an "our history" page - here's Safeway's - that will detail, usually with black and white or atmospherically sepia-toned pictures, a single family's grocery store that began the progression to Super Grocery Corp. of today.
Even Whole Foods, which some have held up here as a national chain, grew this way. Whole Foods bought out a lot of natural foods businesses, small chains like Bread & Circus in the northeast and Fresh Fields in the mid-Atlantic, and other businesses like Amrion (supplements) and Allegro (coffee) which they have turned into private label products. WFM, after some early missteps (unfortunately, I can't remember which acquisition this was in particular, but they rebranded right away and the customers let them hear it in no uncertain terms) that made them wise to Sidhedevil's point above about consumer loyalty and they generally allowed these banners to keep their names for a period after acquisition, with "Whole Foods Market" appended to the end. Eventually they have mostly been sucessfully "folded in" to the WFM name.
So, to go beyond the main question for a moment (I promise to circle back around), why do grocery chains grow this way? Because this is buying four main things that are very expensive to go into a market and establish from scratch: market share, consumer goodwill, distribution, and real estate.
The grocery business is one with razor-thin margins. You have to manage a large amount of very perishable product in a highly labor-intensive type of retail on parcels of expensive commercial real estate (location, location, location). Say you want to increase your sales. In order to make much more money than you're already making, you somehow have to sell more stuff. Groceries are a pretty fixed expense, and therefore a fixed income generator. You can only really grow your sales - hopefully - at the rate of population growth in your markets. But that's not a great rate of growth. What if you want more? Increasing your market share in markets you already operate in requires a lot of advertising, expensive in itself. Maybe you can get more sales by building new stores in your markets, but depending on how saturated ("overstored" or "understored") your market is, that risks cannibalizing your existing stores.
So what can you do so that your company continues to grow? Expand into new markets. But it's terrifically expensive to do that. Sometimes you can manage it, but that means you're having to pay money to build new stores and distribution centers and then you have to duke it out for market share with the companies that are already there. Better to buy one of them out. Then you get their market share, goodwill, distribution, and real estate, all already established.
But wait a minute, you say, the question is why are there these things like Best Buy (media/electronics), Barnes & Noble (books/media), and Starbucks (coffee charred beyond belief) when there aren't "national" grocery stores? And my theory is timing.
Those stores are what is called, in the retail trade, "category killers." This sort-of-bloody name refers to these chains' ability to be seen as the "destination" for that category; their ability to dominate the trade in a business in an area to the extent that smaller, weaker stores are weeded out.
They also have in common that their rise has happened more or less during the same time period - a time period well after the beginning of grocery chains' consolidation. Essentially, what they did was take the regional-to-national structure of a grocery store and do it one better. Rather than growing by buying up competitors or chains in other markets, they created a national network of distribution from scratch and either used it to supply bigger, "better" stores or applied it to categories to which it had not previously been applied. These chains were generally well-capitalized (especially as compared to grocery stores' margins) and developing during a time of generally strong economic growth. They were not handicapped by trying to mesh up or phase out legacy systems (which bogs down cobbled-together grocery chains) or merchandise perishable goods. They could focus on taking a model - generally large retail stores, supported by distribution centers in sparsely populated areas - that'd been in place at least 50 years and making it work on new land in ever-expanding exurbs and in markets that'd never had stores like these before, places where people would make a special trip to go to those "destination" stores.
But wait a second, these "category killers" had to go out and build and establish all the expensive things that grocery stores need, right? Right, mostly, but rather than building a similar store to what was already present in the market, they ate up whole categories or opened new categories in those markets. Yes, of course, they had to compete with established stores that sold the same or similar goods in those markets, but I think most of us can probably think of a record store, bookstore or coffee shop that fell to one of these giants, and I'm sure we could all elucidate the details of the major shift in the way coffee is purchased and consumed in the U.S. now as compared to 20 years ago.
So when grocery stores were growing and beginning to do the big-fish-eats-the-little-fish thing, a lot of regional and regional-to-national chains were established in populated areas. And the expectation of the time became that banners were regional and that consumers wanted to see them stay. And that has stayed that way. But as retail trends shifted to include the rise of these (mostly) big box stores, they took some things from the grocery model (distribution over a widespread area) but grew large all at once and thus were able to do it under the same name.
I think I've wandered over some ground others have trod, and I apologize for taking so long to get to the point. My degree is in food marketing (yes, there is such a ridiculous level of educational specificity!) and it's obviously something I love talking about.
posted by jocelmeow at 6:49 PM on September 9, 2009 [16 favorites]
There are certain companies known in the grocery industry as "national chains" - though they may not be what some here would consider national (not having stores in all 50 states). These are the Krogers, the Safeways, the Supervalus, as you'll find on _Progressive Grocer's_ Top 50 list here (PDF) and _Supermarket News'_ top 75 list that Comrade_robot linked above. Most of them operate under a variety of banners (store names) in different markets.
How did these national chains come about? Robert Angelo noted above that chains "expanded and shrank and expanded again with changing business fortunes." They buy and divest, trading banners and regions among themselves. This has been going on, to a progressively greater level of consolidation, for a century or so. If you look at a lot of grocery chain stores' websites, you will often find an "our history" page - here's Safeway's - that will detail, usually with black and white or atmospherically sepia-toned pictures, a single family's grocery store that began the progression to Super Grocery Corp. of today.
Even Whole Foods, which some have held up here as a national chain, grew this way. Whole Foods bought out a lot of natural foods businesses, small chains like Bread & Circus in the northeast and Fresh Fields in the mid-Atlantic, and other businesses like Amrion (supplements) and Allegro (coffee) which they have turned into private label products. WFM, after some early missteps (unfortunately, I can't remember which acquisition this was in particular, but they rebranded right away and the customers let them hear it in no uncertain terms) that made them wise to Sidhedevil's point above about consumer loyalty and they generally allowed these banners to keep their names for a period after acquisition, with "Whole Foods Market" appended to the end. Eventually they have mostly been sucessfully "folded in" to the WFM name.
So, to go beyond the main question for a moment (I promise to circle back around), why do grocery chains grow this way? Because this is buying four main things that are very expensive to go into a market and establish from scratch: market share, consumer goodwill, distribution, and real estate.
The grocery business is one with razor-thin margins. You have to manage a large amount of very perishable product in a highly labor-intensive type of retail on parcels of expensive commercial real estate (location, location, location). Say you want to increase your sales. In order to make much more money than you're already making, you somehow have to sell more stuff. Groceries are a pretty fixed expense, and therefore a fixed income generator. You can only really grow your sales - hopefully - at the rate of population growth in your markets. But that's not a great rate of growth. What if you want more? Increasing your market share in markets you already operate in requires a lot of advertising, expensive in itself. Maybe you can get more sales by building new stores in your markets, but depending on how saturated ("overstored" or "understored") your market is, that risks cannibalizing your existing stores.
So what can you do so that your company continues to grow? Expand into new markets. But it's terrifically expensive to do that. Sometimes you can manage it, but that means you're having to pay money to build new stores and distribution centers and then you have to duke it out for market share with the companies that are already there. Better to buy one of them out. Then you get their market share, goodwill, distribution, and real estate, all already established.
But wait a minute, you say, the question is why are there these things like Best Buy (media/electronics), Barnes & Noble (books/media), and Starbucks (coffee charred beyond belief) when there aren't "national" grocery stores? And my theory is timing.
Those stores are what is called, in the retail trade, "category killers." This sort-of-bloody name refers to these chains' ability to be seen as the "destination" for that category; their ability to dominate the trade in a business in an area to the extent that smaller, weaker stores are weeded out.
They also have in common that their rise has happened more or less during the same time period - a time period well after the beginning of grocery chains' consolidation. Essentially, what they did was take the regional-to-national structure of a grocery store and do it one better. Rather than growing by buying up competitors or chains in other markets, they created a national network of distribution from scratch and either used it to supply bigger, "better" stores or applied it to categories to which it had not previously been applied. These chains were generally well-capitalized (especially as compared to grocery stores' margins) and developing during a time of generally strong economic growth. They were not handicapped by trying to mesh up or phase out legacy systems (which bogs down cobbled-together grocery chains) or merchandise perishable goods. They could focus on taking a model - generally large retail stores, supported by distribution centers in sparsely populated areas - that'd been in place at least 50 years and making it work on new land in ever-expanding exurbs and in markets that'd never had stores like these before, places where people would make a special trip to go to those "destination" stores.
But wait a second, these "category killers" had to go out and build and establish all the expensive things that grocery stores need, right? Right, mostly, but rather than building a similar store to what was already present in the market, they ate up whole categories or opened new categories in those markets. Yes, of course, they had to compete with established stores that sold the same or similar goods in those markets, but I think most of us can probably think of a record store, bookstore or coffee shop that fell to one of these giants, and I'm sure we could all elucidate the details of the major shift in the way coffee is purchased and consumed in the U.S. now as compared to 20 years ago.
So when grocery stores were growing and beginning to do the big-fish-eats-the-little-fish thing, a lot of regional and regional-to-national chains were established in populated areas. And the expectation of the time became that banners were regional and that consumers wanted to see them stay. And that has stayed that way. But as retail trends shifted to include the rise of these (mostly) big box stores, they took some things from the grocery model (distribution over a widespread area) but grew large all at once and thus were able to do it under the same name.
I think I've wandered over some ground others have trod, and I apologize for taking so long to get to the point. My degree is in food marketing (yes, there is such a ridiculous level of educational specificity!) and it's obviously something I love talking about.
posted by jocelmeow at 6:49 PM on September 9, 2009 [16 favorites]
Response by poster: Well I guess that takes care of that.
posted by Damn That Television at 7:49 PM on September 9, 2009 [1 favorite]
posted by Damn That Television at 7:49 PM on September 9, 2009 [1 favorite]
Keep in mind that just because you're a Giant you don't have to be a Giant Ahold. There are two unrelated Giant supermarket chains in America.
posted by NortonDC at 8:03 PM on September 9, 2009
posted by NortonDC at 8:03 PM on September 9, 2009
Keep in mind that just because you're a Giant you don't have to be a Giant Ahold. There are two unrelated Giant supermarket chains in America.
I'm not sure I follow -- both are owned by Royal Ahold, right? Historically, though, they are certainly two different chains. I remember my hometown in MD having both a Giant and a Martin's. Martin's was another name for a Giant-of-Carlisle franchises in order to avoid branding issues between them, Giant of MD and Giant Eagle of PA.
posted by av123 at 10:36 PM on September 9, 2009
I'm not sure I follow -- both are owned by Royal Ahold, right? Historically, though, they are certainly two different chains. I remember my hometown in MD having both a Giant and a Martin's. Martin's was another name for a Giant-of-Carlisle franchises in order to avoid branding issues between them, Giant of MD and Giant Eagle of PA.
posted by av123 at 10:36 PM on September 9, 2009
Kroger (or any of its other brands) does not appear to have much of a presence in the Northeast...
Kroger was in Pittsburgh up through the early 80s, which may or may not count as "Northeast." They pulled out due to labor conflict.
posted by Chrysostom at 12:15 AM on September 10, 2009
Kroger was in Pittsburgh up through the early 80s, which may or may not count as "Northeast." They pulled out due to labor conflict.
posted by Chrysostom at 12:15 AM on September 10, 2009
Loyalty: The word "Kroger" makes me hungry. I haven't lived where they had a Kroger store in decades. But in my 20's, Kroger was the premium store for especially good things. The association is amazingly strong.
posted by Goofyy at 4:28 AM on September 10, 2009
posted by Goofyy at 4:28 AM on September 10, 2009
You're right, av123. I didn't realize that they had both become Giant Aholds.
posted by NortonDC at 4:44 AM on September 10, 2009
posted by NortonDC at 4:44 AM on September 10, 2009
The Lucky's (everybody says Lucky's, even though it's officially Lucky) changed its name to Albertsons a while back, and people were very slow to refer to it by its new name.
I grew up in a Lucky market area and distinctly remember that when they were bought out, there was a concomitant TV ad campaign that basically amounted to "Lucky and Albertson's are getting married!" ...only, there suddenly weren't any more Lucky stores around.
My friends and I started referring to Albertson's as the Black Widow.
posted by kittyprecious at 7:16 AM on September 10, 2009
I grew up in a Lucky market area and distinctly remember that when they were bought out, there was a concomitant TV ad campaign that basically amounted to "Lucky and Albertson's are getting married!" ...only, there suddenly weren't any more Lucky stores around.
My friends and I started referring to Albertson's as the Black Widow.
posted by kittyprecious at 7:16 AM on September 10, 2009
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Looks like a lot of "regional" chains are just under large national umbrellas.
posted by Skot at 10:47 AM on September 9, 2009