ELK GROVE, Calif. — Raley's Supermarkets is planning to convert a store here to its Food Source warehouse banner, according to reports, as a wave of new competition prepares to enter the chain's core Sacramento market.
The conversion marks the first time the company has rebannered one of its Raley’s stores, local observers said, “and it may signify a preemptive strike to get ahead of the curve before Wal-Mart and others begin moving in,” a Northern California observer told SN.
It was not clear last week if Raley’s conversion is an isolated instance or part of a broader plan as a host of new competitors prepares to move into the city, including Wal-Mart, Kroger Co., Fresh & Easy and Smart & Final.
Company officials could not be reached for comment on the converted store in Elk Grove, located about 10 miles outside Sacramento.
Raley’s has market share of about 28.2% in Sacramento, according to Tucson, Ariz.-based Metro Market Studies, down from 28.6% a year ago. Safeway follows with 16.7%, then Costco with 11.9% and Save Mart with 9.2%.
