The grocery space is highly regional, with various chains dominating different parts of the country. With food inflation slowing, we rounded up five regional grocery chains that have seen consistent growth in H1 2023 and are well-positioned to continue their strong performance in H2 and beyond. Find out what is spurring foot traffic to these chains and what lessons these stores can teach the wider grocery segment.
- Stater Bros. Markets: From Depression-Era Jobs to The King of the Inland Empire
Stater Bros. Markets, a grocery chain based in Southern California, opened its doors during the Great Depression and has since expanded to over 170 locations across the state. The chain is known for its local and family-friendly shopping experience, with relatively small stores located near distribution centers to ensure the freshness and locality of its products.
Overall monthly visits to the chain grew in 2023 relative to 2022 despite the closure of several stores, and the year-over-year (YoY) increase in average visits per venue was even larger. Stater Bros.’ strong foot traffic trends indicate that the chain is maintaining its loyal visitor base and that customers who used to patronize the shuttered stores are likely re-routing to Stater’s other venues.
- Smart & Final: California Cash & Carry
Smart & Final, another California-based chain, is one of the country's oldest warehouse grocery chains. The company was one of the first grocery stores in the country to offer cash and carry, or the ability to take your groceries home after shopping instead of having the grocer deliver them to your door. Its commitment to innovation and improvement has not slowed since. Today, Smart & Final shoppers can take advantage of its warehouse-style shopping options without a membership card at its Smart & Final Extra! Stores.
Interest in warehouse-style grocery shopping remains highly popular, and Smart & Final is reaping the benefits, with the chain outperforming both the California grocery category and the wider nationwide grocery sector on a YoY monthly visits basis. And as consumers continue to prioritize shopping in bulk to save money where possible, the chain is poised to continue thriving.
- WinCo Foods: Winning The Discount Game
WinCo Foods, once dubbed “Walmart’s Worst Enemy”, is another discount grocery that mixes bulk shopping with low prices. The Boise, Idaho-based chain was recently ranked as one of the cheapest grocery stores in the country, a welcome designation for shoppers as grocery prices continue to rise.
WinCo has been experiencing strong YoY visit growth, with August visits up 3.6% relative to August 2022. And in a sign that the chain is seeing an influx of customers engaging in mission-driven shopping, the share of WinCo visitors spending between 30 and 44 minutes in-store grew from 27.4% in 2022 to 30.0% in 2023.
- ShopRite & Price Rite: Appealing To a Wide Base
Price Rite and ShopRite are both affiliated with Wakefern and capture significant market share in the Northeast. But the two chains differ in their customer profile – Price Rite is a discount grocery chain, while ShopRite is a full-priced grocery store with a wide range of house brands. And though they are located within the same region, there is only minor overlap between the chains to avoid cannibalization.
Both chains experienced positive monthly foot traffic on a YoY basis for the months analyzed, though Price Rite consistently exceeded ShopRite’s visits. Price Rite’s prices are approximately 20% lower, and its success highlights the trend of discount grocers thriving in an inflation-market period.
Perhaps unsurprisingly, there is a significant difference in the median household income (HHI) between ShopRite and Price Rite shoppers. The STI: Popstats dataset reveals that shoppers at Price Rite tend to come from trade areas with a median HHI of $50.1K. In contrast, ShopRite visitors come from areas with a median HHI of $88.3K. This stark contrast in median HHI highlights how effectively both chains have embedded themselves within their respective communities.
- Market Basket: The Pride of New England
New England grocery chain Market Basket, recently crowned the top-ranked grocer for inflationary times, has been around for over 100 years. The chain is hugely popular in the region, with 88 locations across New Hampshire, Maine, Rhode Island, and Massachusetts.
Although visits to the chain lagged somewhat following the outbreak of COVID-19 when compared to a January 2020 baseline, Market Basket pulled ahead of the wider grocery industry in January 2022. Since then, visits to the chain have consistently exceeded the wider grocery sector. The chain enjoys strong customer loyalty – shoppers staged a boycott of the store when the supermarket’s board fired popular company president Arthur Demoulas. This commitment to fostering a strong sense of community has also kept the chain from adding self-checkout kiosks to their stores to encourage positive interactions between shoppers and workers. This decision, coupled with the chain's strong foot traffic, highlights how investing in the shopper experience and fostering a sense of community can drive success in the grocery category.
Grocery’s A Go
There’s plenty of room for many kinds of grocery retailers to thrive and carve out niches for themselves within their communities. The success of Market Basket and Stater Bros. proves that investing in community pays off, while WinCo and Smart & Final’s elevated visits demonstrates the appeal of bulk buying. ShopRite and Price Rite’s success within their region shows that offering shoppers a range of options from the same umbrella pays off.
For more data-driven grocery insights, visit placer.ai/blog.