More supermarkets are changing their colors and growing outside their traditional food retailing boxes.
m the competition and further grow market share. It's an avenue that more retailers are pursuing at a time when there are less big acquisitions taking place, and real estate is saturated with food players.
If carefully thought out and targeted, new formats can reap real growth for their companies.
The five food retailing formats presented here are worth watching not only for their growth potential, but for how the companies have zeroed in on a specific population segment to create shopping experiences to fill specific needs. More than capturing share of stomach, these retailers have tapped into their shoppers' economic status, their time-pressed needs, and even their emotions.
Larry Johnston, Albertsons' chairman, has stepped up the rollout of its food-drug combos, offering those shopping primarily for health care a one-stop-shopping destination that combines food, pharmacy and expanded health products. While these formats are more expensive to operate, they also are more profitable. See story below.
It has been previously reported that A&P's Chairman Christian Haub planned to convert many A&P stores to the low-price, no-frills Food Basics, a format that's reaped good returns in Canada. While it may not be the case for all its locations, Food Basics is showing promise in urban areas where low prices and volume count. See Page 16.
H.E. Butt rolled the dice nine years ago when it introduced Central Market, a high-end format dedicated to fresh foods and specialty items. While there are only seven Central Markets in Texas, H-E-B has developed hybrid stores that incorporate successful merchandising elements from this format. See Page 19.
Avanza, a Hispanic format introduced last year in Denver, was a priority of Nash Finch Chairman Ron Marshall. The company spent three years developing this concept that it says touches the hopes, dreams and aspirations of first- and second-generation Mexican Americans. See Page 22.
The food industry has learned to live with the Wal-Mart Neighborhood Market, a format perceived by traditional food retailers as a big threat when it was first introduced in 1998. With this format, Wal-Mart is trying to satisfy those shoppers in a rush. See Page 24.
