Stiffer competition for grocery-store dollars in several area communities will dilute the profits of competitors, but will ultimately benefit consumers, local grocers, and the industry, the Dayton Daily News reports.
The most recent boost in competition among southwest Ohio supermarkets doesn’t quite rival the grocery wars of the late 1980s and early 1990s, when Cub Foods, Meijer, and Sam’s Club stores entered the market just as Kroger was adding locations. But shoppers in several communities have more choices than ever on where to spend their grocery dollars, with even more options on the way.
Target stores are expanding their grocery departments to devote 10,000 square feet to fresh produce, packaged meats, prepackaged baked goods, frozen foods, and dry goods. Target’s move follows a similar strategy at Walmart.
The Fresh Market has opened a West Chester Township location. Fresh Market is a chain of gourmet or “boutique” supermarkets that are becoming more and more popular with shoppers by offering a large selection of organic food.
Walmart, already the largest grocery retailer by sales in the U.S., said recently it will lower grocery prices by $1 billion this year as a way to attract more customers. Walmart had $145 billion in grocery sales last year.
Within a few months of opening the largest Kroger Marketplace store ever built, in south Centerville, the Cincinnati-based grocery chain that already has 109 grocery stores in its Cincinnati-Dayton marketing area announced it would build another new store five miles from the new Centerville store.
Industry specialists say the competition is healthy for the companies and beneficial to consumers. “We’re always encouraged when there is a lot of competition in an area,” said Nate Filler, president of the Ohio Grocers Association. “Having a lot of competition is also great for the consumer, as it will help to drive down price and provide better quality and value for the customer.”
The competitors themselves seem to agree. “Competition in any market is good for business,” said Rachael Betzler, spokeswoman for Kroger, which, she said, offers competitive prices as well as fuel rewards, direct custom coupons, and faster checkout times. Plus, Kroger, which has stores throughout Butler and Warren counties, has operated in southwest Ohio for nearly 130 years, and the company and its employees have participated in charitable events and supported community organizations.
The precise details of how grocery chains such as Kroger choose a site for a store are at least somewhat shrouded in secrecy for competitive reasons, but Betzler said Kroger listens carefully to customer feedback and tracks growth in various communities.
The impact of an all-out grocery war can be devastating to local, independently owned grocers, as the owners and shoppers of long-defunct stores such as Kelly’s Market, McGee’s, Davey’s Carry-Out, and local IGAs can attest. The owners of some of the remaining independents say they know they’ll feel some pain from the additional competition for grocery dollars, but they believe they will survive and will find ways to compete successfully.
Steve Dillman, owner of Dillman’s on Central Avenue in Middletown, described the grocery market as “very challenging” and said sales in the last decade have dropped “considerably.” Independent grocery stores, he said, are being hurt by drug stores that are offering paper products at a reduced price as a way to attract customers, while leaving perishables items much as meats, what Dillman called “more complicated” products, to the grocery stores. Dillman said he has reduced his advertising budget, preferring to run in-store and online specials. Along with the influx of new stores and those retailers that now offer grocery products, Dillman said he’s fighting an increase in crime and poverty in the Middletown area. “I can deal with competition,” said Dillman, 60, a lifetime grocer. “I can’t fight crime and poverty. My clientele has changed dramatically the last 10 years.”
Louise McCracken, who owns and operates Dabbelts in Hamilton, said turning a profit, with the increase in competition, “isn’t easy, I can tell you that.” She said it gets “harder every year,” and said she made more profit when she bought the grocery 33 years ago than she did last year. “I try to keep my prices as low as possible without being ridiculous,” she said. McCracken said she has been able to keep the doors open because of her “loyal customers,” those from the neighborhood, some of whom don’t own a car. “Without them,” she said, “I’d have been closed a long time ago.” She said her customers have come to expect hot foods and daily specials. She’s known for her fried chicken, she said. When asked about other smaller grocery stores in the Hamilton area, she said: “There aren’t many of me left.” (Mark Fisher is a retail reporter for the Dayton Daily News: www.daytondailynews.com)