Grocery store openings increased 30 percent in 2018

New grocery store openings were up 30% in 2018 as compared to the prior year, according to a report by JLL. More than one-quarter of the new stores were in Florida, California and Texas as a result of expansion by Publix, Sprouts Farmers Market, Aldi, Kroger and H-E-B.

"Grocery is one of the strongest retail sectors, with nearly twice as many new stores opening than closing last year," according to JLL Director of Research James Cook.

Cook also pointed out that shopper habits have shifted to more frequent, shorter trips, and as a result, food retailers are focusing on developing smaller format stores.

"In 2019 we expect to see even more grocery stores rolling out their smaller-format stores as they battle razor-thin margins in prime locations, while still serving evolving consumer needs," said Cook.

Aldi, which accounted for 16% of total new stores by square footage, continues to expand at a rapid pace. And new formats, like Giant's 9,500 square foot Heirloom Market in Philadelphia, were recently introduced.

Sprouts to open 30 new stores in 2019

Sprouts Farmers Market announced earlier this month that it plans to open nine new stores in the second quarter of 2019. Overall, the company expects to open about 30 new stores for the year, the same as in 2018.

The stores opening in the second quarter are in New Jersey (Marlton), Louisiana, Virginia, Florida (2), California (3) and Arizona.

Eight stores opened or are slated to open in the first quarter of the year. They are in California (2), Texas, Florida (3), Washington and Nevada.

Sprouts currently operates 320 stores in 19 states.

Fresh Market trying to become a more mainstream grocer

The Fresh Market announced in late April that it plans to close five stores. At the same time, the company is continuing its effort to become a more mainstream grocer with the rollout of new stores in South Carolina and Florida that feature an updated look and more everyday grocery items.

The stores slated for closure are in Northern New Jersey, New York, Virginia, Florida and Illinois.

The Fresh Market debuted its new format last year in three North Carolina stores, and one earlier this year in Florida. These stores include an increased selection of local products and traditional grocery offerings like pet and baby products. The company said the stores also include an emphasis on "sharp pricing."

Private investment firm Apollo Global Management acquired The Fresh Market last year for $1.36 billion.

The Fresh Market expanding in CA, TX and FL

The Fresh Market isn't worried about Whole Foods' competitive price positioning and feels it is less prone to price sensitivity than its competitors, according to CFO Jeffrey Ackerman.

"Our view is that people are coming to us for the quality of the service, the quality of the food and a different shopping experience," Ackerman said last month.

The company plans to open 23 or 24 new stores in fiscal 2014, seven of which will be in Florida. Recent expansion efforts in Sacramento and Houston have struggled, and stores in Laguna Hills, CA and Dallas-Fort Worth are slated to open in the next year.

Analysts were cautiously optimistic about The Fresh Market's outlook following its first quarter earnings release last month. A Wells Fargo analyst said she was "encouraged to see comps did not decelerate in Q1, traffic was positive, new store productivity is improving and the company is committed to its refocused real estate strategy."

Three Bottom Dollar stores to close in PA

Delhaize America announced yesterday it would close Bottom Dollar food stores in North Wales, Chalfont and Reading, PA. The company is also closing 33 Sweetbay stores in Florida and eight Food Lion locations in North Carolina, South Carolina and Virginia. All the stores are expected to close by mid-February.

Bottom Dollar entered the Philadelphia market in October 2010 and quickly expanded. According to the company's website, there are now 37 stores operating in southeastern PA and southern NJ. Last year Bottom Dollar expanded to western PA and eastern Ohio, where it now has 16 stores.

Sweetbay, whose first store opened in Florida in 2004 and which currently has 105 stores throughout the state, will layoff approximately 2,000 employees. According to Delhaize Group CFO Pierre Bouchut, the elimination of the 33 money-losing stores should provide a $40 million benefit to underlying profits annually. He added that he expects Sweetbay to be profitable in 2013.

Wawa opens sixth Florida store

Wawa opened its sixth Florida store late last month. The company began opening stores in Florida in July, and has plans for 25 more in 2013, with a total of 100 new stores in five years. The six operating stores are in Orlando and Kissimmee. Expansion to the Tampa area will begin next year.

Wawa has nearly 600 convenience stores - 300 of which offer gas - in Pennsylvania, New Jersey, Delaware, Maryland, Virginia and Florida.

Wawa opens first Florida store

The first Wawa in the state of Florida opened last week in Orlando, and as many as 100 may open in the state over the next five years. For now, residents of Orlando can expect a new Wawa every week for the next five weeks.

A store in Tampa is slated to open next year, and Wawa expects 20 new Florida stores in 2013, then 25 stores each in 2014 and 2015.

For more on Wawa's expansion to Florida, see New prototype Wawa under development for Florida.

Dollar Tree adds pharmacy to FL store

Dollar General has a grocery concept, and now Dollar Tree has a store with a pharmacy. Dollar Tree recently contracted with an independent pharmacy based in Boca Raton, FL, to add a location inside a Deals stores in West Park, FL. (Deals is a Dollar Tree variety store concept.)

Although there are people who have doubts that consumers will trust a dollar store for their prescription drug needs, the concept may very well succeed if it competes well in the areas of price and convenience. These two factors have been driving sales up at dollar stores for some time now as they successfully compete with Walmart and traditional supermarkets.

New prototype Wawa under development for Florida

Wawa CEO Howard Stoeckel said recently that the company's stores scheduled to open this year in Florida will resemble a restaurant that sells gas, rather than a convenience store, as we are accustomed to in Pennsylvania and Delaware. The new store prototype will be built around fast-casual food and convenience, and will feature an array of proprietary foods and a "barista-style" coffee department.

According to reports, the first Florida store will open in Orlando in July, and five more locations will follow in the Orlando market in the following months. Stores in Tampa are scheduled to open in early 2013. Overall, the company expects to operate about 100 stores in central Florida over the course of the next five years.

Wawa signs leases, plans to enter Florida market

According to the Orlando Business Journal, Wawa has signed "more than 10" leases in the Orlando, Florida market, and the retailer has indicated it will open as many as 100 stores in the state.

According to a Wawa regional real estate manager, site work on the first set of stores will begin in the next month or two, with openings taking place next summer.

Currently Wawa has 588 stores in Pennsylvania, New Jersey, Delaware, Maryland and Virginia. Fuel is offered at 298 of these locations (that's more than half for those keeping score).

I have previously written about Walmart's entry into the convenience store/gas arena and their roll-out of up to 350 stores per year, but I doubt the Greater Philadelphia area is high on their list because of Wawa's domination here. It'll be interesting to see, however, if the Big Ws battle it out in the Sunshine state!

Save-A-Lot's plans include growth and flexibility

A Supermarket News article earlier this week detailed Save-A-Lot's widely publicized plans to double their store count to 2,400 by 2015.

According to Save-A-Lot President and CEO Bill Shaner, the hard discount format is underdeveloped in the U.S., especially as compared to Europe and South America. Now is the opportunity to build market share, he says. Their stores, which average 15,000 square feet, currently have sales of about $80,000 per week.

Some interesting tidbits from the story provide good insight into Save-A-Lot's strategy:

• Save-A-Lot, a division of Supervalu (Acme), is experimenting with new opportunities to drive its expansion, including co-branded stores (with Rite Aid stores in South Carolina and a Hispanic-oriented operator in Texas) and new offerings, such as deli departments.
• The company has regionalized its real estate and development team by spreading them across the country rather than housing them entirely in St. Louis, as they had done previously. According to Shaner, this new structure provides Save-A-Lot with in-market expertise.
• According to a map of expansion opportunities on their website, Pennsylvania can expect 50-100 new Save-A-Lot stores in the next couple years, while New Jersey can expect 25-50 new stores. The biggest growth areas are California, Texas and Florida. Larger urban markets will see more corporate store openings, while smaller markets will see more licensed independent operators.

Incentives and Flexibility

• The company is supporting all licensees who open a Save-A-Lot by providing them with at least $200,000 in financing per store. They say it costs an average of $822,500 to open a new store.
• Executives have decided to be more flexible in the store's building requirements by "letting the building be the building," rather than imposing a proscribed design. General construction standards as they pertain to lighting, flooring and walls have been relaxed as well.
• A more localized product offering, including about 15% of the merchandise that can be customized to the market, has been introduced in an attempt to improve sales performance.

Here's the Supermarket News article: Thinking Outside the Small Box