THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: FRIDAY, June 10, 1994 TAG: 9406100750
SECTION: BUSINESS PAGE: I1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
DATELINE: 940610 LENGTH: Long
According to an annual survey, supermarket chains in Hampton Roads lost about $90 million of the money spent on food to alternative retailers.
{REST} Supermarket chains' share of the region's food spending fell to $1.71 billion this year from $1.8 billion last year, according to the annual survey by trade magazine Food World. Shoppers in the region spent about $2.73 billion on food and other products sold in supermarkets in the past year.
``In the 15 previous years, we've never seen a decline in supermarket sales,'' said Food World Publisher Jeffrey W. Mettzger.
Despite shrinking supermarket sales, Farm Fresh Inc.'s sales didn't lose ground and maintained the lead among all grocery retailers in the region.
Food Lion Inc. narrowed the gap with Farm Fresh as it opened two new groceries. Food Lion had been nearly tied with Farm Fresh in the 1992 survey but fell behind last year after Farm Fresh bought Gene Walter's Marketplace.
Norfolk-based Farm Fresh operates 45 stores in the region under the names Farm Fresh, Rack & Sack and Gene Walters Marketplace. Salisbury, N.C.-based Food Lion has 62 groceries in Hampton Roads. Combined, the two chains rake in 75.3 percent of the money spent in supermarkets alone in Hampton Roads.
With $665 million in sales in the year ended March 31, Norfolk-based Farm Fresh had 24.4 percent of the total food market. Food Lion had 22.9 percent of the market with sales of $623.1 million in the same period up, from $610.1 million the year before.
Here is how some of the other top food sellers compared:
The region's nine military commissaries make up the region's No. 3 food retailer with $234 million in sales and a 8.6 percent market share.
Convenience store chain 7-Eleven was fourth with sales of $175 million and a 6.4 percent market share.
The region's No. 3 supermarket, Super Fresh, saw its sales rise $5 million to $107.2 million in the latest survey. Super Fresh, a division of The Great Atlantic & Pacific Tea Co., known as A&P, was ranked sixth on the overall sales list with a 3.9 percent market share.
Despite flat sales of just more than $82 million, the region's No. 4 supermarket, Be-Lo Foods, fell to ninth in this year's overall survey from seventh last year. Be-Lo, a division of Norfolk-based Camellia Food Stores Inc., had a market share of 3 percent.
On the Eastern Shore, Food Lion took the lead position away from longtime leader Acme Markets. Super Fresh was in third place. Food Lion, which added three new stores, grew at the expense of Acme and Camellia Foods' divisions Food City and Meatland.
In Richmond, Ukrop's Super Markets Inc. and Food Lion were first and second with 30.6 percent and 21.6 percent of supermarket sales respectively. Farm Fresh, operating as The Grocery Store, surged into third place after it bought the Richmond area Safeway stores.
Food World produces two market-share surveys for Hampton Roads and other regions. One compares just supermarkets' sales. The other measures the impact of commissaries, drug chains, convenience stores, club stores and discount stores such as Kmart and Wal-Mart on sales of food and other products sold at supermarkets such as health and beauty aids and tobacco.
``You have to look at anyone who sells what we sell,'' said Walter Grant, president of Camellia Food Stores Inc., the Norfolk-based parent of the region's No. 4 supermarket chain, Be-Lo Foods. ``The Wal-Marts and Kmarts of the world are definitely competitors now.''
The surveys in the June edition of Food World are based on sales from April 1, 1993, to March 31, 1994, and compare to those in the previous 12 months.
Food World's Mettzger attributed declining supermarket sales in Hampton Roads to the relatively few number of supermarket chains here and to the big market share of military commissaries. Shoppers in the region have fewer chains to choose from than in any other Mid-Atlantic market, Mettzger said, including Washington, Richmond and Baltimore.
Military commissaries take a big slice of business away from the commercial supermarkets, too, he said.
The supermarkets' loss of about $90 million in sales has been Wal-Mart and Kmart's gain. Kmart picked up $22.4 million in sales and Wal-Mart picked up $12.7 million.
Kmart, which opened a Super Kmart Center on the Peninsula last year, moved up one place, to seventh, on the list with a 3.7 percent market share as its grocery sales soared to $100.5 million from $78.1 million.
Wal-Mart also advanced a place, to eighth, as its grocery sales rose to $87.8 million from $75.1 million. Wal-Mart's sales don't count those of its warehouse-style subsidiary, Sam's Club, which was 15th on the list with sales of $21.2 million and and a 0.8 percent market share.
The big losers among supermarkets weren't the big chains, but independent retailers.
``The smaller guys are getting hammered,'' said Michael Julian, Farm Fresh chairman and chief executive. by CNB