Last year, I wrote about how many of the conventional supermarkets were building larger stores that offered more products in an attempt to compete with new retailers. While this was initially a successful defense, I did not think it ultimately would be the way to defeat these new enemies in the grocery war. Today, it’s rumored that Kroger, which was aggressively building larger stores, has put on hold on any new store development. Did Kroger stop building new stores because someone there read my article and agreed with me, or am I the Nostradamus of grocery war prophecies?
Regardless of my opinion, development of new stores by the conventional supermarkets has slowed, and many observers believe that conventional supermarkets face a new threat from internet giant Amazon with its purchase of Whole Foods. Will Amazon drop the A bomb, moving grocery purchasing online? I don’t think so.
Many companies have tried and failed to convert customers to online grocery shopping. The conventional supermarkets fought back by offering their own internet shopping and delivery or in-store pickup options. Amazon is not new to this either; the website offers grocery products to online shoppers and has started experimenting with brick-and-mortar stores called Amazon Fresh.
When you compare Kroger with Whole Foods, it become clear that the “conventional supermarket” still dominates. Kroger has 2,778 stores in 35 states compared to 438 Whole Foods stores in 28 states. The average store size for Kroger is 62,600 square feet, compared to 39,000 sf for Whole Foods. The average sales…
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