The June 6 blog post (“Profitability And Competition In The Grocery Business“) discusses a variety of issues concerning increasing competition and margins in the grocery business.
In response to Safeway’s recent announcement concerning Dominick’s, the October 11 Chicago Tribune article titled “Dominick’s parent pulling out of Chicago market” offers commentary and statistics regarding the increasingly competitive Chicago-area grocery segment.
Three notable excerpts from the article:
Dominick’s did neither discounts nor delicacies better than its competitors, and even on convenience it had its match in Jewel, which has 178 Illinois locations, mostly in the northern part of the state. Under such brutal pressure, Dominick’s has been losing market share in the Chicago area for some time.
In the Chicago area, according to a source with knowledge of the business, Jewel, which also was sold this year, has a 29.1 percent market share; Wal-Mart, 9.4 percent; Dominick’s, 8.7 percent; and Costco, 7.3 percent. As recently as the late 1990s, Jewel and Dominick’s controlled two-thirds of the market, the source said.
Safeway President and CEO Robert Edwards laid out the problem with Dominick’s in a conference call with Wall Street analysts Thursday evening. He said the Chicago market is “fragmented” and noted the increased competition from new companies. Safeway said the Chicago stores are the lowest performing in the company.
StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.
StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.