The nationwide grocery category suffered a setback in recent months, as inflation led many consumers to tighten their belts and seek out off-price retailers. And even though food prices have finally begun to stabilize, they remain significantly higher than they were last year.
But the state of grocery varies considerably across regions. So with the second quarter of 2023 underway, we continued making the regional grocery rounds, focusing this time on the Northwest – an area encompassing Idaho, Montana, Oregon, Washington, and Wyoming.
Albertsons: The Statewide Winner
Albertsons topped the list as the most popular grocery banner in three out of five Northwestern states: Idaho, Montana, and Wyoming. Safeway, also owned by Albertsons Companies, Inc., was the most-visited grocery chain in Washington. And Fred Meyer, owned by The Kroger Company, enjoyed the highest visit share in Oregon. With an Albertsons-Kroger merger in the works, the two companies appear poised to lead the Northwest grocery space in tandem.
But the Overall Regional Leader is Safeway
But as we’ve pointed out, topping the statewide lists isn’t everything. In many areas, the second- and third-place grocery banners also command a significant portion of the overall visit share. A deeper dive into the most popular supermarkets across the region shows that four banners dominate the local grocery scene: Albertsons, Fred Meyers, Safeway, and WinCO Foods. And looking at the overall regional breakdown of visit share reveals Safeway as the overall regional winner.
WinCo: Leading the Way for Off-Price
The success of WinCo Foods, the privately-held, employee-owned grocery chain with some 139 locations across 10 states – including 66 in the Northwest – shows that smaller brands can also win at the regional grocery game. Based in Boise, ID, WinCo keeps prices low by buying directly from farmers and manufacturers and providing a no-frills shopping experience: Customers can’t pay by credit card, and they have to bag their own groceries. Most locations are open 24 hours a day, and many products can be purchased in bulk.
And WinCo’s low-cost strategy seems to be paying off. Since the beginning of the year, WinCo has greatly outperformed the nationwide grocery sector, with year-over-year (YoY) visits up nearly across the board, partly due to the chain’s continued expansion. While the chain doesn’t rank as the top grocery retailer for any of the analyzed states, its regional visit share stood at 10.9% in April 2023, making it the third-most-visited banner in the region.
The data also suggests that WinCo customers may be more likely than those of other regional grocery leaders to engage in mission-driven shopping. Analyzing the daily visit breakdown for leading groceries in Idaho, Washington, Oregon, and Montana – the four Northwestern states that boast a WinCo – shows that a larger share of WinCo visitors frequent the store on weekends. And WinCo customers tend to remain in-store significantly longer than visitors to other leading food retailers: median dwell time at WinCo stores across the analyzed states ranged from 32-35 minutes, compared to 26-29 minutes for other leading regional grocers. Customers appear to be flocking to the low-priced chain on weekends, when they have more time to browse the aisles and stock up on discount goods.
While several big chains dominate the nationwide grocery scene, food shopping remains a highly localized affair. For Texans, there’s nothing quite like H-E-B, and Northeasterners can’t get enough Stop & Shop. In the Northwest, Albertsons banners win the day, with Kroger’s Fred Meyer close behind. But the significant growth experienced by employee-owned WinCo shows that there’s plenty of room for smaller players in the grocery space – especially those that offer inflation-wary shoppers low-cost alternatives.
For more data-driven grocery insights, visit placer.ai/blog.