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    Publix, Wal-Mart Expected Biggest Gainers from Albertsons Closures

    BOISE, Idaho - Let the shuffling begin. The closure of 125 stores owned by Albertsons LLC this month August should allow competitors in 26 different markets, including such heavy weights as Publix and Wal-Mart, to increase their grocery market share and possibly shift the balances of power in some cases, according to a multi-market study issued yesterday by Trade Dimensions International, Inc., based on Wilton, Conn.

    BOISE, Idaho - Let the shuffling begin. The closure of 125 stores owned by Albertsons LLC this month August should allow competitors in 26 different markets, including such heavy weights as Publix and Wal-Mart, to increase their grocery market share and possibly shift the balances of power in some cases, according to a multi-market study issued yesterday by Trade Dimensions International, Inc., based on Wilton, Conn.

    In June, Cerberus Capital Management LP, new owners of 645 Albertsons, Grocery Warehouse, and Super Saver stores under the Albertsons LLC umbrella, revealed its plans to close 125 supermarkets, affecting 26 core based statistical areas (CBSAs) across the country.

    Three Grocery Warehouse locations, 26 Super Saver stores, and 96 Albertsons-bannered stores in seven states will close, the company said. By division, the closings have the greatest impact on the Northern California, Dallas and Extreme divisions, which will see 36, 30, and 25 closings respectively. Other affected divisions include the Rocky Mountain (16 stores), Southwest (9), Florida (8), and Southern California (1) divisions.

    Many of the country's largest markets, including top 25 markets Dallas-Fort Worth-Arlington, TX; Denver-Aurora, CO; Miami-Fort Lauderdale-Miami Beach, FL; Phoenix-Mesa-Scottsdale, AZ; San Diego-Carlsbad-San Marcos, CA; San Francisco-Oakland-Fremont, CA; and Tampa-St. Petersburg-Clearwater, FL will see market share shifts, according to Trade Dimensions.

    Using Trade Dimensions market share information, along with a Spectra Dollar Flow report, Trade Dimensions said it's able to make predictions as to where the former Albertsons customers will spend their money once the Albertsons locations have closed.

    Trade Dimensions' breakdown of specific markets includes the following:

    -- Orlando-Kissimmee, Fla.: Less than one-tenth of one percent separates the No. 1 grocery retailer in the Orlando CBSA (Publix, 33.14 percent) from the No. 2 (Wal-Mart, 33.07 percent). With four Super Saver stores, comprising just under 0.90 percent of the total grocery market share, slated for closure, the leading position is truly up for grabs. A Spectra Dollar Flow report shows that the 41 Publix stores and the 20 Wal-Mart stores (including five Neighborhood Markets) in the market will likely experience similar gains after the Super Saver stores close, making for a continued tight race.

    Retailers from other channels should also see a slight bump, including CVS and Walgreens, each of which operate approximately 40 stores in the market; and Target, which has 12. More than 40 independent grocers within a 6-mile radius of any of the closing Albertsons stores in the market also stand to see small gains, according to Trade Dimensions.

    -- Phoenix-Mesa-Scottsdale, AZ: With just under 400 supermarkets in its boundaries, the Phoenix CBSA is a large, highly competitive one. Wal-Mart leads the pack with 25.92 percent of the grocery market, followed closely by Kroger (Fry's, 22.29 percent), Bashas (18.40 percent), and Safeway (14.44 percent). The eight Albertsons stores that are closing comprise 1.25 percent grocery market share. Capturing that share would close the gap for any of the four leaders above, but it appears that Kroger's Fry's stores and Wal-Mart will actually see fairly similar sales increases, Trade Dimensions predicts. Fry's may have the advantage here though, as its 67 stores in the market are an average of 3.4 miles away from the closest Albertsons store. In addition, the characteristics of a typical Fry's location (size, format, merchandise lines, ACV) tend to be close to those of a typical Phoenix-area Albertsons store. Wal-Mart's 41 stores in the market are, on average, 4.1 miles away.

    Bashas' 50 Phoenix-area stores will likely only see just half the sales increase as the two grocery leaders, according to Trade Dimensions' estimates. Here too, as in Orlando, non-grocery retailers like Circle K, Target, and Walgreens should expect to see fairly sizeable gains too.

    -- Deltona-Daytona Beach-Ormond Beach, FL: What is already a relatively tight race for first place in terms of grocery market share is expected to get even more competitive. As of June 2006, Wal-Mart's five supercenters in the market comprise 33.78 percent of the total grocery market share, landing it in first place. Publix's 19 supermarkets, however, are not far behind, with 33.64 percent share. Less than two-tenths of one percent separates the two chains. Subtract the share garnered by the two Super Saver locations closing in the market (2.26 percent), and the race becomes even closer.

    As in Orlando, the race for share here comes down to Publix and Wal-Mart, with Publix having a slight edge, if only because of proximity. Publix locations are closer on average to either of the closing Super Saver stores, at just 3.5 miles, while Wal-Mart stores are an average of 6.8 miles away from either Super Saver.

    -- Vallejo-Fairfield, CA: Led by Safeway (27.51 percent of the grocery market) and Raley's (19.13 percent), Vallejo is only losing one Albertsons store; three other locations in the market will remain open. But because the market is a small one -- only 36 supermarkets as of June 2006 -- any store opening or closing tends to have a dramatic effect. Albertsons current share is 6.88 percent; the one store closing leaves the door open for Safeway, Raley's, or Save Mart.

    Spectra's Dollar Flow report indicates that because of its proximity to the closing Albertsons store -- it is less than one-tenth of a mile away -- one particular Raley's location could benefit more than any other store in the market. The four Raley's stores in total should see a combined increase equal to 3.5 times the increase that the three Safeway stores will see. The grocery market share race in Vallejo will get even tighter as Save Mart's two Food Maxx locations will see a total increase that is less than Raley's, but greater than Safeway.

    Trade Dimensions International, Inc. is owned by ACNielsen Homescan & Spectra and is a VNU business.

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