Sendik’s will open its 15th store, a former Sentry’s in Waukesha, later this year and is also expanding its Fresh2GO concept with a store opening in Greendale, WI followed by another in Hales Corners; all stores market Sendik’s Fresh2GO line of foods with gas and convenience offerings.
Receivers expect the trend of smaller store openings to continue. “Recently we’ve seen Midwest retailers beginning to make the move towards stores with a smaller footprint and providing a geographically/demographically focused set of product offerings,” posits Corsaro. “We’ve seen retailers with a longstanding Midwest presence continue to make an investment in this area through new stores and remodels.”
Although there are new retailers entering the marketplace (like German discounter Lidl) and all manner of experimentation with store size and product range, established supermarket chains have also undergone bankruptcies, mergers, and buying sprees, driving consolidation across the country.
Indianapolis-based Marsh Supermarkets entered bankruptcy with Kroger and Findlay, OH-based Fresh Encounter buying multiple locations. Central Grocers, Inc., owner of the Strack & Van Til chain, Ultra, and others, also went bankrupt. Although Jewel-Osco, owned by Albertson’s, bid for 20 Strack & Van Til stores, it was bested by Indiana Grocery Group, led by Strack and Van Til family members to recapture the popular Hoosier grocery chain. In addition, the merger of Associated Wholesale Grocers and Affiliated Foods Midwest Cooperative impacted independents operating in the regions farthest west and north of this area.
At least one new store location was directly tied to the biggest news in U.S. food retailing during the first half of the year: Amazon’s acquisition of Whole Foods Market. A new Whole Foods, in downtown Indianapolis, is set to open in late 2017. Whole Foods operates three locations in St. Louis and the greater Cleveland area, with at least one location in each of the other markets profiled here. At press time, it was still too soon to tell the impact of the much-touted Whole Foods acquisition in the Midwest, or anywhere else.
Despite changes in size and product mix, retail chains are also facing competition from online sales. Most are stepping up convenience and delivery options to stay above the fray. Walmart is offering online ordering and pickup service, and local and national supermarket chains are partnering with Instacart. Niche delivery services are taking note too, like Indianapolis-based Green Bean Delivery, which expanded into the St. Louis market.
I is for Impact
The abundance of options, according to Corsaro, is making wholesalers work a little harder. “Today, there are numerous retail business models each with their own purchasing formula. We have price-conscious retailers, experience-driven retailers, club stores, and online markets—these models have created a diverse retail landscape and forced supply chain participants throughout the world to manage multiple buying personas.”
