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    The Flickinger Files - Part 2: Super 50 'Report Card'

    Industry expert grades top retailers' performance

    By Burt P. Flickinger III

    Editor's Note: During a 12-month expedition that’s spawned dramatic ripples across the mighty supermarket seas, this year’s annual Super 50 ranking of the nation’s leading food retailers is punctuated by a swift undercurrent of mergers, acquisitions, spinoffs and wider expansion nets that are collectively redefining the ecosystem. With this the case, PG editors broke down this year's Super 50 analysis into five “oceans,” each consisting of common characteristics akin to each:

    At the Helm: Larger legacy retailers that have weathered many a storm over the years, with strategic growth, innovation and a com­mitment to the customer experience

    Rising Tide: Owning a strong presence in their various market areas, these grocers, through a savvy mix of tried-and-true ap­proaches, are well grounded and willing to take risks with new concepts to forge ahead

    Beyond the Mainstream: Grocers owning the natural and organic category, or swal­lowing an ever larger portion of it, through persistent stewardship and faithful execution

    Changing Course: These retailers have redefined themselves, or are in the process of endeavoring to do so, as a way of better navi­gating the changing demands of a dynamic marketplace

    Steady as They Go: Regional players with true staying power, dedicated to their core customers and local communities

    As the second installment of a two-part series, retail food industry expert Burt P. Flickinger III, managing director of New York-based Strategic Resource Group (SRG), assesses the Super 50 food retailers in the Changing Course, Beyond the Mainstream and Steady as They Go camps, in a continuation from Part 1 here.

    (Grading on a scale of A+ to F-)

    Beyond the Mainstream

    Whole Foods: Grade B Whole Foods still has some of the highest-volume, most productive stores in the industry. The company has dynamic leadership. Its issues are beyond bricks and mortar, which can be fixed.

    Trader Joe’s: Grade B+  Slower than its sister company, Aldi, to accelerate  expansion in high-opportunity states, TJ's picks some secondary sites in Eastern markets – occasionally with insufficient parking – apparently to save on store rents.

    Sprouts: Grade B While Sprouts has had a successful expansion, it appears to have some of the cap ex issues that The Fresh Market has had, in not investing consistently across the store base.

    Aldi: Grade A+ After nearly five decades of measured expansion, Aldi has a formidable, larger, high-volume food format, which is winning with all income and age groups. When a leading five-star restaurant chef is shopping at Aldi weekly – as one of five “suppliers” for quality in Wegmans' home market [of Rochester, N.Y.] – Aldi can beat any food retailer who is not ready.

    Changing Course

    Walmart: Grade B+ A new leadership team appears to be bringing back the ways of “Mr. Sam” [Walton, company founder] to clean up 15-plus years of mistakes made by the former board and the prior CEOs. The transition could take a few years.

    Ahold/Delhaize:  Grade Incomplete  Delhaize-Hannaford-Food Lion has better people in a number of key positions, and Ahold has to avoid the mistakes made with Giant and Ukrop's of losing sales, market share and shoppers by “company bagging” what works in Massachusetts and Connecticut, yet did not connect previously with consumers in Maryland and Virginia, and will not in the Southeast, northern New England and New York state.

    Raley’s: Grade Incomplete As new leadership makes and implements changes, it will be interesting to see what unfolds for the West Sacramento, Calif.-based regional grocery chain's next chapter in the competitive California market.

    Target: Grade B+ Target is moving beyond the problems passed along by the two prior CEOs and management teams. Assortments are improving, from consumables to wearables (apparel and accessories). The CVS Rx partnership could be a powerhouse. Understaffing stores and significant out-of-stocks on weekends could suppress success until the company takes more constructive, corrective action.

    The Fresh Market: Grade B-  Historically, a good idea with inconsistent executive management and too many underperforming stores in too many markets. TFM’s private equity buyer, Apollo, has had a mixed track record in retail, with some success as well as some reported retail failures.

    Woodman’s: Grade A  Woodman’s is an exciting, exceptional place for shoppers with high, fresh quality, and everyday lowest prices in states with high taxes and high costs of living for cash-constrained consumers. Woodman’s biggest opportunity is to expand to fill more of a competitive vacuum, while replacing some of the sales lost from plant closings and job and population losses in Woodman’s legacy markets.

    Brookshire Grocery Co.:  Grade Incomplete Following its “For Sale/Not For Sale” period, this is a rebuilding year.

    By Burt P. Flickinger III
    • About Burt P. Flickinger III A leading expert on all aspects of the supermarket wholesaling and retailing industry, Burt P. Flickinger III is managing director of Strategic Resource Group (http://srginsight.com).

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