CONSUMERS IN Sacramento, Calif., are shifting their business this year toward Safeway, Costco and Wal-Mart Supercenters — the three companies that are picking up market share.
Consumer shifts to Wal-Mart and Costco are not surprising in the weakening economy, observers said, though they acknowledged they were surprised by the gains No. 2 Safeway has made.
Safeway, Pleasanton, Calif., with its lifestyle upgrades, picked up a full share point, moving to 16.7% from 15.7% a year ago with just one additional store, according to the most recent data from Metro Market Studies, Tucson, Ariz. Observers said they believe the chain's efforts to emphasize value as part of its conventional pricing have apparently been effective in driving traffic.
Among Safeway's efforts are promoting “lower prices on the 5,000 items you buy most,” temporary price reductions up and down the aisles, and a series of 72-hour sales.
Locally based Raley's remains the market leader, with a share of 28.7%, compared with 30.3% a year ago, despite adding three stores.
Raley's, which also operates Bel Air Markets in Sacramento, has been trying to improve its price image during the recession “by stepping out of its comfort zone (as a conventional operator) more often and doing some very unusual things,” one local observer told SN.
“For example, Raley's is putting more emphasis on pricing by using in-ad coupons more often, including running three-day ads with full pages of coupons,” he noted.
Costco, Issaquah, Wash., is No. 3 in the market, adding a half-point for a market-share total of 11.9% for its seven warehouses, compared with 11.4% a year ago.
Save Mart, Modesto, Calif., which entered the market by acquiring the Albertsons chain in 2007, saw its 2009 share dip to 9.2%, compared with 9.9% a year ago.
According to a local source, the stores it acquired were in good physical shape, “but the market share [of the Albertsons stores] had been sliding very quickly, and pricing was out of line.”
Wal-Mart was the big winner this year, adding one supercenter while boosting its market share to 5.2%, compared with 3.6% in 2008.
The city's other low-price player is Winco, the Boise, Idaho-based discounter that “every so often will come out with ridiculous prices — items well below cost,” one market source said.
SACRAMENTO
| RETAILER | STORES | MARKET SHARE '09 | MARKET SHARE '08 |
|---|---|---|---|
| Raley's, Bel Air | 59 | 28.7 | 30.3 |
| Safeway | 32 | 16.7 | 15.7 |
| Costco | 7 | 11.9 | 11.4 |
| Save Mart, Food Maxx | 23 | 9.2 | 9.9 |
| Winco | 5 | 5.5 | 5.7 |
| Wal-Mart Supercenter | 5 | 5.2 | 3.6 |
| Nugget Market, Food 4 Less | 10 | 4.5 | 4.7 |
| Sam's Club | 6 | 4.3 | 4.5 |
| Trader Joe's | 6 | 1.8 | 1.9 |
| Kroger Food 4 Less | 4 | 1.7 | 1.8 |
| Smart & Final | 7 | 1.5 | 1.6 |
| Grocery Outlet | 11 | 1.4 | 1.5 |
| Unified Grocers | 63 | 1.2 | 1.2 |
| Whole Foods Market | 2 | 1.1 | 0.7 |
| C&S Wholesale | 13 | 0.9 | 1.5 |
Includes El Dorado, Placer, Sacramento and Yolo counties.
SOURCE: Metro Market Studies
