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    Report: Kroger, H-E-B, & Randall's to Benefit Most From Albertson's Departure

    HOUSTON - As Albertson's withdraws from the Houston market, it leaves behind 500,000 of the most affluent grocery shoppers in the market and sets off a feeding frenzy among its former competitors.

    HOUSTON - As Albertson's withdraws from the Houston market, it leaves behind 500,000 of the most affluent grocery shoppers in the market and sets off a feeding frenzy among its former competitors.

    The grocery chains expected to benefit most are Kroger, H-E-B and Randall's, which "shared" the largest number of shoppers with Albertson's. "Albertson's shoppers are the most affluent in the market with an average household income of $68,300," says Phil Beswick, president of International Demographics, a Houston research firm that surveys 85 U.S. markets to gather demographics, lifestyle, media and marketing data.

    Albertson's withdrawal from the market creates opportunity and "sets off a feeding frenzy among all grocers," says Beswick, "but the prize to be gained won't offset their losses to the incredible market penetration achieved by Wal-Mart during the past five years."

    According to Beswick, Wal-Mart "now has attracted about 17 percent of Houston grocery shoppers compared to five percent in 1999." Wal-Mart, says Beswick, will probably benefit from the Albertson departure "but only in a minimal way, because the two chains shared few shoppers."

    Wal-Mart shared about 80,000 shoppers with Albertson's, while Kroger shared 270,000, H-E-B 152,000 and Randall's 144,000. Kroger still dominates the Houston market with a 49 percent penetration. It is followed by H-E-B with 32 percent and Randall's with 23 percent. Randall's penetration of the market has been declining in the past few years, while H-E-B has been climbing. In 2000 H-E-B passed Randall's to move into second place. Seventeen grocers serve at least one percent of the market.

    "A lot of the changes in market penetration by the grocery chains is influenced significantly by the demographic changes in the market itself," says Beswick. For instance, he says, "The growth in one-person households during the past five years is approximately 45 percent. That fact alone has significant meaning for grocers, restaurant owners and executives in many other retail categories."

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