Supermarkets: innovation and equity planning

Innovation at sister companies of Giant Supermarkets.  A few years ago I wrote a piece, "Urban retail #4: how to prevent the coming failure of the DC region's Giant Supermarket chain," opining that Giant Supermarkets," the DC-MD-Northern Virginia supermarket firm that once dominated the market with more than 50% market share (and in 1999 still had 45% of the local market), was on the decline by comparison to a revitalized Safeway, the entry of Harris-Teeter (now owned by Kroger, the nation's largest supermarket chain), Whole Foods, and the increased number of stores Walmart is opening within the Beltway, including their entry to DC.

Since then, they've opened three new stores in DC and they are getting better, but generally aren't as attractive as the best of the new Safeway stores, although the O Street Marketplace store has a nice cafe area and the Cathedral Heights store on Wisconsin Avenue NW has beer taps for growlers and regularly scheduled wine tastings.

In the meantime, the parent company has announced merger plans ("Deal Unites Major Supermarket Players," Wall Street Journal) with Delhaize, owner of Food Lion (Mid-Atlantic and the South) and Hannaford (New England), which is probably why the Stop & Shop division is buying a bunch, but not a huge number of stores from A&P.

But last year the company also bought a single store company in Rhode Island ("Stop & Shop parent to buy Eastside Marketplace," Providence Journal), known for their creativity, as the centerpiece of a innovation initiative incorporated as Fresh Formats LLC.

I can't imagine Giant Supermarket advertising that they have "kickass" prices, the way that their sister company, Everything Fresh, is doing.

While Giant is still not particularly innovative in the DC market, although they do a good job with lower pricing, although with that comes a cost of a more limited product selection, it happens that in Philadelphia and Boston, the parent company has introduced small format urban groceries--around 10,000 s.f. is the largest--that appear to be doing what Whole Foods has announced that they will be doing with their 365 concept--which I figure is more about selling more prepared foods to younger demographics who aren't cooking.

In Philadelphia the stores are called Everything Fresh and the new format for Boston, which just opened in the Allston neighborhood, is called bfresh ("Stop & Shop parent carts out new concept," Boston Herald).  Based on images of the newest store, I'm impressed.

The bfresh store has a bulk foods section, quite an array of produce, breads baked fresh in a wood oven and of course, plenty of prepared foods.

It's the kind of format that Tesco should have created when they unsuccessfully launched the Fresh & Easy company in the Western US.

2.  When looking up a story about a new supermarket opening in Newark, NJ, I came across a story in the Newark Star-Ledger ("Why does a lawsuit usually follow a new supermarket") about how supermarket companies sue localities when they grant planning permissions to new supermarkets.  It's out of the Nimby Wars playbook (Forbes Magazine).  In general, the plaintiffs don't have a good case, but as the article points out, each month companies keep competitors from opening, they make a little more money.

3.  A&P is shutting down, and while the company isn't even 1/160 of its reach at its peak, the closure of stores hurts poorer communities, because other supermarket companies are less interested in such locations.

This is an issue in Wilmington, Delaware ("Delaware's food deserts grow," Wilmington News-Journal), although interestingly new research indicates that food deserts--places without grocery stores--aren't necessarily worse off nutritionally ("Food deserts may play little role in obesity, Rand study says," Los Angeles Times).

I have made that point for awhile, because the definition of a food desert in terms of geography doesn't jibe with how the supermarket industry organizes its store footprints on a 3 mile to 5 mile retail trade area radius and because people take the steps they need to buy food.

Nevertheless, access to fresh foods is an issue that should be monitored and addressed by local planning departments in equity and retail planning (cf. "City supermarkets: few and far between," Reading Eagle), and localities should be prepared to act when companies go out of business, compromising community access to groceries.

4.  However, the Wakefern business cooperative, operating as ShopRite and PriceRite stores, is making a greater push in re/entering urban markets, with the assistance of their Philadelphia-based affiliate Brown's Supermarkets, and its UpLift Solutions retail consultancy firm.  Besides the stores in Philly, other members have opened stores in Baltimore and are just about to in Newark as mentioned above.

Image of apples at Daily Table from WBUR.

5.  Another firm recently created to target less well off consumers and those looking to save extranormally, at least in Boston, is Daily Table, a store specializing in "expired date products" which are still fine to eat and less attractive produce, all at a lower price ("New twist on the supermarket for low-income families," CBS News; "New Nonprofit Grocery Store In Dorchester Sells Surplus And Aging Food At A Steep Discount, WBUR-FM/NPR).

The company was started by an ex-president of Trader Joe's.  Apparently these types of stores are called salvage grocery stores ("Salvage Grocery Stores: The Next Big Thing In Food Isn't Even New," Modern Farmer) and aren't new (in fact I remember one back in the early 1990s behind the Hecht's warehouse in Ivy City).  The article lists such a store in Richmond I didn't know about, Fresh to Frozen.

Some complain that the store creates competition for food banks according to Business Insider ("Boston's Store For Expired Food Is Looking Like A Better And Better Idea").

Image from Al Jazeera.

6.  A couple years ago, in association with the Philabundance food bank based in Philadelphia, a nonprofit grocery was created in Chester, Pennsylvania called Fare & Square.  It's been in operation for a couple years now.

According to an article from NextCity, "Nation’s First Non-Profit Supermarket Is Picking Up Steam," the store needs to double its volume to break even.

From an "action planning" model standpoint, if Fare & Square gets their systems and structures down, I'd think that the brand and identity and program could be "franchised" to other nonprofits as a form of social enterprise and a way to seed retail in other underserved areas.