WHILE METROPOLITAN New Orleans continues to suffer from the lingering impact of 2005's Hurricane Katrina, most of the major operators in the Greater New Orleans market are holding their own. Wal-Mart Supercenters, meanwhile, are gaining share.
In the metro area, “there are still large sectors that have gaping holes where people and stores used to be, and that isn't going to change for a long time,” Barry Breaux, chairman and president of Breaux Markets, Metairie, La., told SN.
Parts of the region have seen more people leaving than staying, Breaux noted — particularly along the north shore of Lake Pontchartrain, where a lot of empty-nesters who left after the water receded are unlikely to come back, he said. However, people are moving back into those areas very slowly, and it's hard to tell yet what supermarkets will fill the gap to serve them, he pointed out.
Across the several parishes that make up the larger marketing area, shoppers are looking for value.
“Consumers are driving the bus,” Jay Campbell, president and chief executive officer of Associated Grocers, Baton Rouge, pointed out, “and as a result, everyone is having to promote value more effectively.”
Wal-Mart Stores starts that process with an edge, since it already has the perception of lower pricing, particularly on nonfoods, Campbell noted.
Wal-Mart, Bentonville, Ark., continues to lead the New Orleans market, with 11 supercenters and two Neighborhood Markets — one more than last year — boosting the company's market share this year to 32%, up from 28.8% a year ago, according to the most recent data from Metro Market Studies, Tucson, Ariz.
That increase seems to have come incrementally from almost everyone else in the market.
Winn-Dixie Stores, Jacksonville, Fla., held on to control the second-largest market share in the area, with its 26 stores accounting for a 22.2% share, down from 22.8% last year.
“Winn-Dixie has done a very effective job in the New Orleans market,” Campbell said. “Since coming out of Chapter 11, it's been more aggressive in advertising and promotion, and it's improved store operations.”
Winn-Dixie has had its New Orleans stores on and off the market over the years, observers noted, though chain officials told SN they now consider New Orleans one of their best markets — one in which they see opportunities for growth. In fact, the chain will open its first new store since 2003 later this year in Covington, La., a bedroom community along the north shore, on the outskirts of New Orleans.
The biggest competitive change in New Orleans the past couple of years has been the entry of Rouses into the marketplace. Based in Thibodeaux, La., Rouses moved into the Big Easy early last year when it acquired the majority of Save-A-Center stores there from A&P.
“A&P was not doing very much with the stores in the waning months before the sale,” Campbell noted, “whereas Rouses is doing more because it has more invested in the success of those stores.”
Rouses' 19 stores in New Orleans have an 18% share of market, down slightly from 18.5% a year ago, according to Metro Market Studies.
Given its Louisiana roots, Rouses advertises itself in New Orleans as “the Bayou Boys” to give itself a more localized identity, “and it seems to be doing very well with the acquired stores,” Breaux pointed out.
Making a bid to localize its own operation, Winn-Dixie launched a major marketing campaign in and around New Orleans last week focusing on the chain's use of local suppliers and featuring store-level people and local personalities to establish its own local identity using the tag line, “Local flavor since 1956.”
The company plans to expand the new, multi-media advertising campaign to other Winn-Dixie markets later this year, a spokeswoman told SN last week.
The 35 independent stores in New Orleans supplied by Associated Grocers have maintained a market share of 5.1%. Campbell said the economy has really been helpful to local independents “because our members are featuring more favorable offerings each week to help customers stretch their budgets.”
|RETAILER||STORES||MARKET SHARE '09||MARKET SHARE '08|
|WM Supercenter, N. Market||13||32.0||28.8|
|AG of Baton Rouge||35||5.1||5.1|
|Whole Foods Market||2||3.5||3.6|
|M. Langenstein & Sons||2||1.1||1.4|
Includes Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist and St. Tammany parishes.
SOURCE: Metro Market Studies.