Kroger, Hy-Vee set pace for store visits in competitive Midwest supermarket scene

The Kroger Co. and Hy-Vee lead in grocery store visit market share in the Midwest, heading a competitive field with seven supermarket retailers in 12 states, according to new data from foot-traffic analytics firm Placer.ai.

In January, Kroger Co. store banners held the No. 1 spot in terms of store visits in four states (Indiana, Kansas, Ohio and Wisconsin) and the No. 2 slot in two states (Michigan and Nebraska), while Hy-Vee came in first by visits in three states (Iowa, Nebraska and South Dakota) and second in another three states (Kansas, Minnesota and Missouri), Placer.ai said in its “Many Ways to Win: Midwest Grocery Deep Dive” report.

Kroger’s store visits include its namesake banner as well as its Dillons, Baker’s Plus Supermarkets and Pick ’n Save chains. Other companies with multiple banners among the leading chains by visits included Albertsons Cos. (Jewel-Osco and Safeway), Coborn’s (Cash Wise Foods and Hornbacher’s) and SpartanNash (Dan’s Supermarket and Family Fare).

Placer.ai, which based the store visit counts on its January Brand Dominance Map, noted that leading supermarkets tend to dominate certain geographic areas because grocery is a regionally focused retail segment.

Source: Placer.ai, “Many Ways to Win: Midwest Grocery Deep Dive” report, March 2023.

Nine different brands claimed the largest share of grocery visits in at least one of the 12 Midwest states, and two brands had the greatest visits share in multiple states,” Placer.ai author Ezra Carmel wrote in the report. “Kroger—the Cincinnati-based chain—was the predominant brand in Ohio and Indiana, and Hy-Vee—with its headquarters in West Des Moines—had the highest visits share in Iowa, South Dakota and Nebraska. Other statewide visit share leaders include Cash Wise Foods in North Dakota, Cub Foods in Minnesota, Pick ’n Save in Wisconsin, Meijer in Michigan, Jewel-Osco in Illinois, Schnucks in Missouri and Dillons in Kansas.”

Of the 12 Midwestern states examined, the store visit share leaders were the following: Hy-Vee in Iowa (65%), Hy-Vee in South Dakota (58%), Meijer in Michigan (49%), Kroger in Ohio (43%), Dillons in Kansas (42%), Hy-Vee in Nebraska (41%), Kroger in Indiana (35%), United Natural Foods Inc.’s Cub Foods in Minnesota (31%), Schnuck Markets in Missouri (28%), Jewel-Osco in Illinois (27%), Cash Wise Foods in North Dakota (27%) and Pick ’n Save in Wisconsin (22%).

The Dakotas offer an example of how grocers can grab store visit share by honing a “go local” strategy, as pursued by Coborn’s Cash Wise and Hornbacher’s banners, Placer.ai’s report showed. Coborn’s acquired Hornbacher’s in late 2018.

“In the absence of an expansive store fleet that crosses multiple state lines, smaller grocery brands can cash in as leaders in their local markets. Cash Wise Foods and Hornbacher’s—two relatively small brands—are the top grocers in North Dakota and don’t appear on the list for any other state,” Carmel explained in the report. “The two brands also claim a significant and fairly similar percentage of the state’s grocery visits—27% and 20%, respectively. Both of these brands have found a unique strategy to drive visits. Cash Wise Foods has more stores statewide, while Hornbacher’s has more locations concentrated in and around the state’s most populous city, Fargo.”

Source: Placer.ai, “Many Ways to Win: Midwest Grocery Deep Dive” report, March 2023.

Similarly, Hy-Vee and Safeway snare visit share by staking out opposite sectors of South Dakota and those areas’ chief cities, avoiding overlap.

“Another strategy for grocery brands looking to operate in regions where one player dominates the local market is to divide and conquer,” according to Carmel. “In South Dakota, rather than duke it out in the same market, Hy-Vee and Safeway—the two most-visited grocery chains in the state—each control a different area of the grocery space. Hy-Vee’s locations serve eastern South Dakota and the state’s biggest city, Sioux Falls, while California-based Safeway claims the western half of South Dakota and its second-largest municipality, Rapid City.”

Retailers also can build visit share by garnering a small percentage of store trips in various states, as is the case with Batavia, Illinois-based Aldi U.S. and its limited-assortment discount grocery model.

“Aldi’s significant share of grocery visits across multiple states indicates that grocery brands can be extremely successful and well-entrenched regionally, even without dominating any one local market,” Carmel stated.

Other grocery retailers finishing among the top three in Midwestern states analyzed by Placer.ai included Fareway Stores (Iowa), Walmart Neighborhood Market (Kansas), Super Saver (Nebraska), Giant Eagle (Ohio), Festival Foods (Wisconsin) and Woodman’s Market (Wisconsin).