Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Grocers Gung Ho after Exit Competitors See Opportunity in Bottom Dollar Departure from Pittsburgh Region

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Grocers Gung Ho after Exit Competitors See Opportunity in Bottom Dollar Departure from Pittsburgh Region

Article excerpt

Even before all of the Bottom Dollar stores closed for good Monday, the independent grocers who own Shop 'n Save stores in the Pittsburgh region were thinking about how to respond to this rare moment when a competitor exits stage left.

They used their weekly advertising flier. "To all Bottom Dollar shoppers, try us for top dollar savings," read the ad sent last week to neighborhoods that were served by both grocers.

In the competitive grocery business, no one can afford to miss an opportunity.

While Aldi plans to buy the real estate assets of the 66-store Bottom Dollar chain owned by Belgium-based Delhaize Group, the deal hasn't closed yet. Batavia, Ill.-based Aldi likely has analyzed the sites and determined which ones would support one of its stores, but it has not shared that information with politicians and community groups hopeful that they'll still have a grocery store where Bottom Dollar used to be.

Aldi, which has more than 1,300 stores in the U.S., knows what it needs to make its limited-assortment, extreme value model work, said Jim Hertel, managing partner at consulting firm Willard Bishop in Barrington, Ill.

Some other operators, especially traditional supermarket operators, have not been as successful in executing the concept of small stores that carry far less merchandise and that cut costs with techniques such as using pallets instead of shelves and having customers bag their own purchases, he said.

One of Aldi's biggest rivals - the Save-A-Lot chain that is part of Minnesota grocery distributor Supervalu's portfolio - was slowed in recent years by restructuring issues at the parent company that meant it missed some of the opportunity opened up by the nation's financial downturn, Mr. Hertel said.

But Supervalu CEO Sam K. Duncan, who said last week Save-A-Lot competes very well against Aldi, told analysts on the company's third-quarter earnings conference call that the Bottom Dollar venture might have made some of its own missteps.

"Those Bottom Dollar stores, a lot of those were very high rent," Mr. Duncan said, in response to a question from an analyst. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.