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    Seizing the Day

    Mergers and acquisitions continue to shape our annual ranking as traditional grocers circle the wagons against a diverse field of competitors.

    By Debra Chanil, EnsembleIQ | Jim Dudlicek, EnsembleIQ | PG Staff


    We don't expect Amazon to show up on the Super 50 any time soon.

    But its entry into the grocery game is a very real concern for traditional players fighting to retain the market share that many of them took for granted for generations. The competition that has ramped up to a fever pitch in recent years shows no signs of letting up. Retailers continue to grow, either organically or through acquisition, in an effort to bolster their position in their core territories. Meanwhile, regions are being reshaped (the Southeast in particular this past year) as banners are swapped back and forth like trades between Major League baseball clubs.

    Price, selection and service still comprise the magic formula for getting consumers in the door, and retailers are spending more time and resources on shopper engagement strategies in an ongoing effort to keep them coming back. Meanwhile, cost containment and capital investment continue to be key elements in delivering a fresh, relevant shopping experience to consumers who are increasingly showing themselves to be brand agnostic and more than willing to divide their loyalties among multiple channels to get what they feel is the best value.

    Be that as it may, traditional grocers show no signs of giving up. On the contrary, their efforts to seize the day continue to impress us.

    Our latest ranking of the top 50 largest U.S. grocery chains remains consistent with recent years, with a few notable exceptions — in particular, Kroger's acquisition of Harris Teeter, which removed that Southeast regional mainstay from its own spot to beef up the Cincinnati-based giant's ongoing title as the nation's largest traditional grocer (and No. 2 overall, behind the perennial Walmart juggernaut). And we expect Safeway's merger with Albertsons, which will be reflected in next year's ranking, to shake things up further.

    In addition to the ranking, we take a closer look at the progress of several noteworthy companies from across the lineup


    Each company profiled in The Super 50 was contacted by PG for guidance regarding the four categories included in the report: annual sales from their most recently concluded fiscal year, store count, top banners and employee counts (either total or full-time equivalents). Full-time equivalent employees are the sum of regular workers, plus one-half the number of part-time employees.

    In cases where companies didn’t respond, data was sourced from public records, including 10K and annual reports. For privately held companies, results are based on information from Nielsen TDLinx, which collects and maintains store information across all channels selling consumer packaged goods. Nielsen TDLinx uses the Food Marketing Institute’s definition of a supermarket: grocery stores with a minimum of $2 million in annual sales; its data omits sales from convenience, drug and other retail channels that may be part of total revenue for some companies.

    Wholesale membership clubs such as Sam’s Club, Costco and BJ’s Wholesale Club are also not included. Supercenters are included, but only for their grocery-equivalent merchandise. Not included are soft goods; clothing; general merchandise such as hardware, appliances, computers and auto service; and other items not common to supermarkets.

    Sales estimates from Nielsen TDLinx are presented in terms of all-commodity volume (ACV), which is defined as an annualized range of the estimated retail sales volume of all items sold at a retail site that pass through the retailer’s cash registers. TDLinx’s ACV is an estimate based on best available data — a directional measure to be used as an indicator of store and account size, not an actual retail sales report. All data is collected by TDLinx from a wide range of independent sources, and then enhanced with computer modeling. Information shown is from the March 2014 database.

    Company Ranking



    Fiscal Year-End
    Sales (000)

    No. of

    Top Banners

    Employees (Total
    or Full-time Equivalents)



    Wal-Mart Stores Inc*
    Bentonville, Ark.



    Walmart Supercenter (3,286)
    Walmart Neighborhood Market (354)
    Walmart Express (21)

    1,400,000 TOTAL



    Kroger Co.



    Kroger (1,312)
    Harris Teeter (230)
    Ralphs (229)

    375,000 TOTAL



    Target Corp.*



    Pfresh (1,262)
    General Merchandise (276)
    SuperTarget (251)

    261,000 TOTAL



    Safeway Inc.
    Pleasanton, Calif.



    Safeway (932)
    Vons (239)
    Tom Thumb/Safeway (63)

    140,000 TOTAL



    Publix Super Markets Inc.
    Lakeland, Fla.



    Publix (1,066)
    Publix Sabor (8)
    Publix GreenWise Markets (3)

    167,000 TOTAL



    Ahold USA Inc.
    Quincy, Mass.



    Stop & Shop (397)
    Giant Food/Carlisle (Including Martin's) (200)
    Giant Food/Landover (170)

    122,000 TOTAL



    AB Acquisition LLC
    Boise, Idaho



    Albertsons (475)
    Jewel-Osco (174)
    Shaw's/Star Market (169)

    115,000 TOTAL



    H-E-B Grocery Co.
    San Antonio



    H-E-B (286)
    H-E-B Plus (31)
    H-E-B Central Market (9)

    80,000 TOTAL



    Delhaize America Inc.
    Salisbury, N.C.



    Food Lion (1,115)
    Hannaford (181)
    Bottom Dollar Food (63)

    89,100 TOTAL



    Meijer Inc.
    Grand Rapids, Mich.



    Meijer (204)

    60,000 TOTAL



    Wakefern Food Corp.
    Keasbey, N.J.



    ShopRite (253)
    PriceRite (54)
    The Fresh Grocer (7)

    50,000+ TOTAL



    Whole Foods Market
    Austin, Texas



    Whole Foods (362)

    78,400 TOTAL



    Bi-Lo Holding LLC
    Jacksonville, Fla.



    Winn Dixie (478)
    Bi-Lo (206)
    Super Bi-Lo (15)

    60,000 TOTAL




    Trader Joe's Co.
    Monrovia, Calif.



    Trader Joe's (413)

    8,500 FTE



    Giant Eagle Inc.
    Pittsburgh, Pa.



    Giant Eagle (217)
    Good Cents (8)
    Market District (8)




    Supervalu Inc.
    Eden Prairie, Minn.



    Save-A-Lot (1,334)
    Shoppers Food Warehouse (56)
    Cub Foods (44)

    35,000 TOTAL


    17 (TIE)

    Hy-Vee Food Stores Inc.
    West Des Moines, Iowa



    Hy-Vee (236)

    69,200 TOTAL


    17 (TIE)

    Aldi Inc.
    Batavia, Ill.



    Aldi (1,300)

    19,100 FTE



    Wegmans Food Markets Inc.
    Rochester, N.Y.



    Wegmans (83)

    44,000 TOTAL



    Great Atlantic & Pacific Tea Co.
    Montvale, N.J.



    Pathmark (102)
    A&P (86)
    Waldbaum's (49)

    34,000 TOTAL



    Defense Commissary Agency (DeCA)
    Arlington, Va.



    DeCA Commissary (246)

    15,000 TOTAL



    WinCo Foods Inc.
    Boise, Idaho



    WinCo (94)

    15,000 TOTAL



    Save Mart Supermarkets Inc.
    Modesto, Calif.



    Save Mart (103)
    Lucky Store/Save Mart (62)
    FoodMaxx (50)

    14,200 FTE



    Roundy's Supermarkets Inc.
    Milwaukee, Wis.



    Pick 'n Save (93)
    Rainbow Foods (29)
    Mariano's (26)
    Copps Food Center (25)

    21,160 TOTAL



    Stater Bros. Markets
    San Bernardino, Calif.



    Stater Bros. (167)

    18,000 TOTAL



    Price Chopper/Golub Corp.
    Schenectady, N.Y.



    Price Chopper (132)

    22,000 TOTAL



    Ingles Markets Inc
    Black Mountain, N.C.



    Ingles (96)
    Sav-Mor Foods/Ingles Markets (9)

    18,700 TOTAL



    Demoulas/Market Basket
    Tewksbury, Mass.



    Market Basket (71)

    7,700 FTE



    Raley's Supermarkets
    West Sacramento, Calif.



    Raley's (78)
    Nob Hill (22)

    8,800 FTE



    Tops Markets Inc.
    Williamsville, N.Y.



    Tops Friendly Markets (155)

    15,000 TOTAL



    Weis Markets Inc.
    Sunbury, Pa.



    Weis (166)

    9,900 FTE



    SpartanNash Co.
    Byron Center, Mich.



    Family Fare Supermarket (54)
    Sunmart Foods (20)
    No Frills Supermarket (17)

    11,125 TOTAL



    Schnuck Markets Inc.
    St. Louis, Miss.



    Schnucks (100)

    10,360 FTE



    Sprouts Farmers Market
    Phoenix, Ariz.



    Sprouts Farmers Market (170)

    15,000 TOTAL



    Houchens Industries Inc.
    Bowling Green, Ky.



    Save A Lot (273)
    IGA (73)
    Food Giant (46)

    16,000 TOTAL



    Brookshire Grocery Co.
    Tyler, Texas



    Brookshire's (118)
    Super 1 Foods (33)

    13,000 TOTAL



    K-VA-T Food Stores Inc.
    Abingdon, Va.



    Food City (94)
    Super Dollar Discount Foods (10)
    Food City Wine and Spirits (1)

    5,500 FTE



    Smart & Final Inc.
    Los Angeles, Calif.



    Smart & Final (153)
    Cash & Carry/Smart & Final (52)
    Smart & Final Extra (36)

    3,059 FTE



    Bashas' Markets Inc.
    Chandler, Ariz.



    Bashas' (64)
    Food City/Bashas' Markets (48)
    AJ's Fine Foods (12)

    5,500 FTE



    Big Y Foods Inc.
    Springfield, Mass.



    Big Y (59)

    10,099 TOTAL



    The Fresh Market Inc.
    Greensboro, N.C.



    The Fresh Market (157)

    9,500 TOTAL



    Grocery Outlet Inc.
    Berkeley, Calif.



    Grocery Outlet (207)

    4,800 TOTAL



    Grocers Supply Co. Inc.
    Houston, Texas



    Fiesta Mart (58)

    4,849 FTE



    Central Grocers Inc.
    Joliet, Ill.



    Strack & Van Til (19)
    Ultra Foods (16)

    3,349 FTE



    Marc Glassman Inc.
    Cleveland, Ohio



    Marc's (57)

    5,728 FTE



    Alex Lee Inc.
    Hickory, N.C.



    Lowes Foods (82)
    JustSave Foods (15)
    IGA (1)

    4,893 FTE



    Woodman's Food Markets Inc. Janesville, Wis.



    Woodman's (15)

    2,442 FTE



    Lowe's Pay-N-Save Inc.
    Littlefield, Texas



    Lowe's Grocery (119)
    Lowe's Big 8 (14)
    Avanza Supermarket (1)

    3,431 FTE



    Inserra Supermarkets Inc.
    Mahwah, N.J.



    ShopRite (21)

    1,809 FTE



    Superior Grocers
    Santa Fe Springs, Calif.



    Superior Super Warehouse (41)

    4,687 FTE


    *Sales figure represents total annual sales; retailer does not break out segmented sales by category.

    Retailer Analysis

    #2 The Kroger Co.

    It seems like there’s just no stopping the nation’s largest traditional grocer, which finished its fiscal 2013 with $98.4 billion in sales and quite a few stores larger with the acquisition of Southeast regional stalwart Harris Teeter, which loses its own spot on the ranking this year.

    Cincinnati-based Kroger topped 10 years of consecutive quarterly sales growth and counting, with same-stores sales up 4.3 percent in Q4, according to the company’s latest financial report in March. Adjusted net earnings clocked in at 78 cents a share for the quarter and $2.85 for the year.

    “Our associates’ connection with customers fueled another year of market share growth and record earnings per share,” Rodney McMullen, Kroger’s CEO, said at the Q4 earnings call. “Kroger’s ‘Customer 1st’ strategy is a powerful foundation on which to continue growing and differentiating our business in 2014.”

    McMullen assumed the chief executive spot with the dawning of 2014 as his “dream team” partner David Dillon opted to retire from the helm while maintaining company chairmanship. Filling McMullen’s shoes as president and COO is Michael Ellis, joining his boss as part of Kroger’s meticulous plan of succession aimed at maintaining leadership stability and inspiring continued growth in a traditional supermarket channel beset by new competition from all sides.

    To be sure, Kroger has the scale and the savvy to maintain dominance for the foreseeable future. Management anticipates same-store sales growth of approximately 2.5 percent to 3.5 percent for fiscal 2014, including Harris Teeter. The company expects capital investments upwards of $3 billion for the year.

    Because the Harris Teeter deal closed in January, it had no effect on fiscal 2013 earnings. But with this new powerful store group added to the mix, look for Kroger’s earnings to trend upward and sales to finally surpass the $100 billion mark when we revisit the Super 50 a year from now.

    #4 Safeway

    Following months of speculation, Pleasanton, Calif.-based Safeway orchestrated a complex $9.4 billion merger deal with Cerberus Capital Management for more than $9 billion in a transaction that will create a network including more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants, with more than 250,000 employees.

    As the largest leveraged buyout in many years, the merger will bring together the second- and fifth-largest grocers in the United States, doubling Safeway’s current footprint and closely nipping at the heels of rival Kroger, which operates 2,600 stores. Slated to close during Q4 2014, the deal remained under review by government regulators at press time, including a recent second request for information from the FTC, which extended the waiting period imposed by the Hart-Scott-Rodino Antitrust Act.

    Cerberus, along with its Symphony Investors unit, has become a familiar name in the food industry in recent years as the investor-owner of about 900 Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores from Supervalu. Cerberus earlier acquired about 600 Albertsons supermarkets, and late last year purchased Lubbock, Texas-based United Family Markets. (Cerberus also reportedly sought to purchase Harris Teeter, but was outbid by Kroger).

    Shortly after the transaction was revealed in early March, Albertsons CEO Bob Miller clarified that the new partners were “clearly intent on keeping the existing retail footprint of both companies intact, heading into the transaction,” which, when complete, will make the combined entity one of the largest employers in America, with more than a quarter-million associates.

    Meanwhile, Safeway’s Blackhawk Network Holdings unit became a 100 percent publicly traded company at press time as a result of the distribution of all of Blackhawk’s Class B common stock to Safeway stockholders. Apart from the Blackhawk spinoff, Safeway unveiled its plan to monetize its 49 percent stake in Casa Ley, the fifth-largest food and general merchandise retailer in Mexico.

    While it’s business as usual for the time being at both Albertsons and Safeway, several key questions about the deal await answers in the coming months, among them: Which stores will be closed or sold? What suitors will pick up overlapping locations (particularly on the West Coast, with Vons and Albertsons)? What revisions will be made to the Cerberus/New Albertsons/AB Acquisition management teams and infrastructure at the corporate and divisional levels? And, of course, how long will Cerberus remain in the big picture?

    Indeed, while many pieces of the Safeway/Albertsons puzzle are coming together, many others remain to be fitted into place.

    #5 Publix Super Markets

    Lakeland, Fla.-based Publix had a momentous year, not only turning in solid quarterly operating performances and further increasing its stock price, but also literally breaking new ground with aggressive forays into North and South Carolina, in one instance buying up seven stores in those states from Bi-Lo Holdings.

    Additionally, the perennial Fortune 100 “Best Companies to Work For in America” pick (17 consecutive years and counting) sold off the locations in its fuel/c-store PIX chain to Circle K Stores Inc., a wholly owned subsidiary of Alimentation Couche-Tard Inc., and Max Arnold & Sons LLC, thus enabling it to concentrate on its core supermarket business. On the health-and-wellness front, Publix led in the areas of medication convenience and safety, expanding its “Sync Your Refills” program to all 925 of its pharmacies, and promoting the “Lock Your Meds” campaign at its Florida pharmacies, in collaboration with Informed Families/The Florida Family Partnership, to raise awareness of and help prevent prescription drug abuse. Such activity suggests that the expanding Southeast regional grocer’s next year will be similarly momentous.

    #6 Ahold USA Inc.

    Amsterdam-based international retail conglomerate Ahold has continued to implement its “Reshaping Retail” strategy, which leverages evolving consumer needs and pursues growth opportunities in both existing and new markets. Ahold has also kept up the rapid expansion of its online businesses, resulting in double-digit sales increases, and is still transitioning toward what CEO Dick Boer calls “a more efficient capital structure” through such means as its “Simplicity” program of streamlining support functions, which allows it to realize cost savings that can then be reinvested in the company.

    Although Quincy, Mass.-based Ahold USA, whose four regional divisions are Stop & Shop New England, Stop & Shop New York Metro, Giant-Landover and Giant-Carlisle, in addition to e-grocer Peapod, experienced a somewhat slow recovery from the devastation of Hurricane Sandy, it’s now on track to have its own-brand product line account for 40 percent of total sales by 2016, and currently working to triple its online food sales by the same year via such strategies as introducing more pickup points for online grocery orders and opening a “digital innovation hub” in Chicago. From all indications, Ahold has locked onto the right growth track.

    #8 H-E-B

    With sales of more than $19.4 billion, H-E-B operates more than 350 stores in Texas and Mexico. Known for its innovation and community service, San Antonio-based H-E-B, which employs more than 80,000 partners and serves millions of customers in more than 150 communities across its home state of Texas, is expanding its footprint into new markets.

    With plans to build a one-of-a-kind store in the affluent Stone Oak section of its hometown and five new stores in Houston, H-E-B has also closed on a number of properties in Dallas-Fort Worth. For now, however, the company says its specialty Central Market format will continue as its primary banner and growth vehicle in DFW, although local media reports speculate that the retailer might grow to as many as 24 locations in the market over the next three to five years, well beyond its five existing Central Market sites, given it’s been circling Dallas for several years with flagship H-E-B stores in Waxahachie, Cleburne and Burleson.

    Meanwhile, H-E-B earned the highest rating of any company evaluated on 2014’s Temkin Experience Ratings, a ranking of the customer experience at 268 companies across 19 industries, based on a survey of 10,000 U.S. consumers.

    In March, the company bowed an extensive line of organic products, with plans to evolve the private-brand line into the largest assortment of organics in the Lone Star State. Indeed, as one of the grocer’s most significant rollouts in recent years, H-E-B Organics focuses on everyday pantry staples, as well as fresh produce, cheese and various beef products. The line also features numerous kid-friendly items such as string cheese, fruit cups, juice boxes, applesauce and lunchmeats.

    #11 Wakefern Food Corp./ShopRite

    Wakefern Food Corp., the largest retailer-owned cooperative in the United States, reached a record $14.1 billion in retail sales in 2013 — a 3.9 percent increase from the same period last year — which is clearly no easy feat in the breakneck markets in which its member owners’ stores compete.

    And compete they do. Adding new members and formats has propelled the 68-year-old co-op, which has continued to thrive in an ever-evolving and rapidly changing marketplace. As shoppers’ needs continue to change, it’s no longer enough for its members to fly the same banner. As such, Keasbey, N.J.-based Wakefern — comprising 50 members who individually own and operate more than 250 supermarkets under the ShopRite and The Fresh Grocer banners in New Jersey, New York, Connecticut, Pennsylvania, Maryland and Delaware — opened 10 new ShopRite stores and one new The Fresh Grocer store last year. In addition, the company expanded its “ShopRite from Home” services to 172 stores. Wakefern has also expanded its PriceRite discount-format chain to a total of 51 stores in six states.

    #13 Bi-Lo/Winn-Dixie

    Chief among Bi-Lo Holdings’ activities over the past 
    12 months was its deal with Delhaize Group, under which Bi-Lo acquired substantially all of the stores in the Sweetbay Supermarket, Harveys and Reid’s banners. The transaction led to a flurry of rebannerings, with seven Georgia Harveys becoming Winn-Dixies, while three Winn-Dixie stores in that state converted to Harveys. Sweetbay and Reid’s stores, meanwhile, are transitioning to the Winn-Dixie and Bi-Lo names, respectively. Additionally under the deal, Bi-Lo had to close a total of 13 stores, all in Florida and South Carolina, because of “close geographic proximity” to some of its other locations. How the newly acquired locations fare under Bi-Lo’s ownership will be exciting to watch.

    Before the acquisition from Delhaize closed, however, the Jacksonville, Fla.-based company had already begun radically redefining its store footprint by entering into an agreement with Piggly Wiggly Carolina Co. to purchase 22 stores, and striking a deal in which Publix Super Markets bought seven Bi-Lo stores in North and South Carolina. Further, Bi-Lo filed a proposed initial public offering (IPO) of shares of common stock in a bid to manage debt, and rolled out the on-trend “Refill Sync” service to its pharmacies.

    #15 Giant Eagle

    During one of its busiest and most productive periods in recent memory, Pittsburgh-based Giant Eagle presided over a medley of format and service expansions in the past 18 months. Among the highlights of the 220-store retailer’s more aggressive moves to further its offerings and fuel its business with destination and convenience stores and geographic expansion, Giant Eagle in December 2013 unveiled the latest iteration of its multiformat store portfolio, with its first-ever 15,500-square-foot Market District Express, in the Pittsburgh suburb of McMurray. As well as what it calls this “bite-sized” version of its eight much larger food-focused Market District stores, the company is reportedly planning to open another small-format store in Bexley, Ohio.

    A pioneer in the loyalty card business with its “Fuelperks!” gasoline rewards program, Giant Eagle, with 187 GetGo gas stations and c-stores, also diversified in the past year with its acquisition of Cleveland -based Rx21 Specialty Pharmacy, a move which will enable it to provide enhanced clinical, operational and mail services to hepatitis C and organ transplant patients. In addition, it has revised its digital marketing and engagement strategies to include more interactive tools tailored to specific customer segments.

    Further, in preparation for its entry into the Indianapolis grocery scene with its first Market District grocery store and GetGo convenience restaurant and fuel station, in The Bridges development in Carmel in 2015, Giant Eagle exited the Toledo, Ohio, market in early May. Speculation is strong that Giant Eagle will make a more pronounced statement in Indianapolis with more than one store, once it gets its talons in the door.

    #16 Supervalu

    Since last year’s Super 50 report, Eden Prairie, Minn.-based Supervalu has focused on efforts to redefine itself following the unloading of its major retail banners to AB Acquisitions, positioning the operation as a more efficient wholesale and retail company consisting of three business units: Independent Business, a wholesaler serving nearly 2,000 stores; Save-A-Lot, a hard-discount grocery chain with more than 1,300 stores nationwide; and five regional banners.

    This retooling of the company has been evident in the frequent changes among executives and board members throughout the year, including Albertsons LLC President and CEO Bob Miller, who replaced Wayne Sales as nonexecutive chairman with the New Albertsons acquisition, and then resigned the post in January 2014, to be replaced by Gerald Storch (Sales remains as a nonpaid adviser to the board). In addition, Bruce Besanko joined Supervalu as EVP and CFO.

    Beyond the executive musical chairs, Supervalu has made organizational and physical changes in an effort to gain efficiencies. Most recently, it announced plans to consolidate its Independent Business unit from three divisions to two, East and West regions, with Kevin Kemp and Bill Chew presidents of each, respectively. Additionally, the company’s Save-A-Lot unit plans to open a new 140,000-square-foot distribution center in Aurora, Colo., to help reduce transportation expenses and shorten delivery times.

    It’s still too early to judge the effectiveness of these moves — according to Supervalu’s Q3 financial results released in January, its retail food and Independent Business identical sales are slightly down and Save-A-Lot’s slightly up — but Supervalu executives are confident that the repositioning efforts will drive future growth. “Supervalu has made positive strides in all three of our business segments to better position the company for financial growth,” CEO Sam Duncan said during a recent earnings conference call, although he admitted that the company still had work to do to improve its sales trajectory.

    #17 ALDI

    ALDI’s no-nonsense approach to grocery retailing appealed to cash-strapped consumers during the Great Recession and spurred the company’s $3 billion commitment to open 650 additional stores in the United States by 2018. The Batavia, Ill.-based chain, which will soon extend from coast to coast, currently boasts 1,300 stores across 32 states. Its growth in the past year saw it rise from a 19th-place ranking to 17th, to tie with Hy-Vee.

    Tactics such as 25-cent cart usage fees, cash/debit/EBT-only transactions, no free bags, self-bagging and no nonessential services (such as banking or pharmacy) mean a slightly leaner but cost-saving experience for shoppers. Costs are further cut by limited assortments — about 1,300 items versus the 30,000 found at larger, national competitors, with nearly all exclusive private label offerings. Further savings come via smaller footprints and lower overhead costs, including open-carton stocking methods.

    ALDI claims that its brands, which include Cattlemen’s Ranch, Clancy’s, Millville, Priano, Sundae Shoppe, Fit & Active, SimplyNature, and Specially Selected, not only account for 90 percent of the products carried in its stores, but are also of the same or higher quality than national brands. Products are backed by the company’s Double Guarantee or refund and product replacement.

    The company successfully sells products at lower prices, but with the perception of value, and in an atmosphere that doesn’t feel down-market. ALDI also takes a cue from its sister retailer, Trader Joe’s, by offering 20 to 30 weekly Special Buys that deliver a “special find” experience to customers.

    #17 Hy-Vee

    Excellent customer service and experience, health and wellness, and culinary expertise are Hy-Vee’s three pillars and the foundations of its current wave of $300 million in capital improvements. The West Des Moines, Iowa-based, employee-owned chain of 235 retail stores across eight Midwestern states is investing heavily to address the lifestyle needs of its customers. The company plans to open five new stores in 2014, with work beginning on several more, and announced plans to enter the Minneapolis/St. Paul market, expanding north of its traditional core marketing area.

    “The supermarket industry is changing rapidly, and companies that don’t invest in new facilities and new technology will be left behind by consumers,” Chairman, CEO and President Randy Edeker said in 
    Progressive Grocer’s January 2014 issue. “We have pledged to our customers and our employees that Hy-Vee will maintain the most innovative, up-to-date stores in every community in which we operate.”

    Additionally, the company revealed in February that it had purchased Amber Pharmacy, an Omaha, Neb.-based specialty pharmacy solutions provider that it had been partnering with since 2010. Specialty pharmacies help patients manage chronic conditions with a health care team, including an enrollment specialist, pharmacist, patient care coordinator and billing coordinator, to create a personalized plan for the patient’s care, insurance and financial administrative assistance. Hy-Vee also features in-store dietitians and is investing in HealthMarket departments across its stores, featuring natural and organic products.

    #34 Sprouts Farmers Market

    Living up to its name, the Phoenix-based fresh-focused grocery chain continues to sprout all over the country, pushing into Kansas and Georgia earlier this year, and opening stores in nine states since the company was founded in 2001.

    Jumping from the No. 42 spot last year, Sprouts’ growth truly has been phenomenal: up 36 percent in fiscal 2013, for net sales of $2.44 billion. “Driven by our best-in-class people, products and prices, Sprouts reported its 27th consecutive quarter of positive same-store comps,” Doug Sanders, president and CEO, said at the company’s Q4 earnings call in February. “In 2013, we crossed the $2 billion sales milestone with the opening of 19 stores. This record performance, in our first year as a public company, demonstrates Sprouts’ ability to create value, build trust and deliver on our strategy to successfully grow our company.”

    Fiscal 2013 net sales growth was driven in part by Sprouts’ June 2012 merger with Sunflower Farmers Market, which brought 38 stores into the fold. Though strong profits were partially offset by inflation-driven lower produce margins, Sprouts has benefited from a growing demand among consumers for fresher, healthier food, and its commitment to provide them with quality merchandise at competitive prices.

    That effort hasn’t gone unnoticed. In April, Consumer Reports named Sprouts one of the top six places in the United States to buy perishables, which Sanders chalks up to “leveraging our regional buying teams to source product from a variety of local, regional and national growers, providing our customers with the freshest produce at the best prices every day.”

    For the coming year, Sprouts anticipates same-store sales growth of up to 8 percent and income growth in excess of 30 percent.

    Can Sprouts maintain this momentum? A recent report in The Wall Street Journal indicated that specialty grocers like Sprouts, Whole Foods and The Fresh Market are slowing down as conventional grocers increase natural food offerings and new markets tighten. And Walmart’s new partnership with Wild Oats to boost natural and organic offerings among the masses by leveraging its vast economies of scale is sure to turn up the heat.

    Service, selection and quality are key ingredients in shopper loyalty, and Sprouts has proved itself up to the challenge.

    By Debra Chanil, EnsembleIQ | Jim Dudlicek, EnsembleIQ | PG Staff
    • About Debra Chanil Debra Chanil is Director of Market Research of EnsembleIQ. She can be reached at [email protected]
    • About Jim Dudlicek As editor-in-chief of Progressive Grocer, Jim Dudlicek oversees daily operations of the magazine, spearheads its signature features, produces PG’s monthly Trend Alert newsletter on center store issues, moderates its regular webcast series, and writes and comments about a wide range of grocery issues. A food industry journalist since 2002, Jim came to PG in June 2010 after covering the dairy industry for 7½ years, during which time he served as chief editor of Dairy Field and Dairy Foods magazines. A graduate of Marquette University, Jim is fascinated by how truly progressive grocers inspire consumers to enjoy food, transforming the industry from mere merchants into educators that can take the most basic of all necessities and turn it into something profound and life-enhancing.
    • About PG Staff

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