INDIANAPOLIS (FNS) -- Independent retailers face a formidable challenge in the next five to seven years from supercenters and new "pantry" departments in discount stores, said Bill Lancaster, vice president of corporate sales at Associated Wholesale Grocers, Kansas City, Kan.
Speaking here at the Indiana Grocery and Convenience Store Association annual convention last week, Lancaster predicted Wal-Mart, Bentonville, Ark., would surpass its stated projection of 100 supercenters per year. Based on the number of Wal-Mart distribution centers in development, Lancaster said Wal-Mart could support as many as 175 new supercenter openings.
Lancaster told attendees that he expects brisk expansion of Wal-Mart's smallest supercenter format, the 109,000-square-foot model, which is designed for small communities. Those units, which do not have bakeries or delis, have lower operating costs, he said.
Lancaster also warned independent operators about the growth of grocery departments at Kmart, Troy, Mich., and Target, Minneapolis. He predicted the growth of these "pantry" departments, which measure 9,000 to 12,000 square feet, could "further erode" sales at independent stores.
Current concerns over supercenters could have been avoided, Lancaster said, if the supermarket industry had done more strategic planning decades ago. Supermarkets should have embraced health and beauty care and general merchandise sections earlier, and also claimed the name supercenters for themselves, he said.