Grocery Wars: As Meijer Enters Mix, 'Something's Got to Give'
Meijer's plans to enter Wauwatosa and Sussex add to a rapidly crowding grocery market populated by Pick 'n Save, Target, Walmart, Costco, Trader Joe's and others. Is there enough business for everyone?
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Since everybody has to eat every day, usually several times a day, there is an inevitability built into the grocery business. There will always be somebody ready to fill that need.
But that doesn’t mean it isn’t volatile.
The retail grocery industry is highly competitive, and since the rise of the chain supermarket, it has typically been a high-volume, low-margin business. If the demand for food is always there out of necessity, it’s still subject to changing tastes, offers of better service or pricing, dips and turns in the economy, demographic shifts in customer bases and fluctuating commodity prices.
Over the past two decades, the grocery business in metro Milwaukee has changed radically, and it is about to change again. Nowhere is that more apparent than in the arrival in the Milwaukee market of Meijer Inc., builder of supercenter stores that focus more on groceries than consumer goods.
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And nowhere in the Milwaukee area is it more acutely apparent than in the west and northwest suburban arc of Wauwatosa, Brookfield, Menomonee Falls and Sussex — in a combination of commercial corridors criss-crossing the greatest concentration of wealth in Wisconsin.
According to a leading local industry analyst, those areas, and perhaps soon much more of suburban Milwaukee, is about to become the battlefront in a game-changing round of Grocery Wars.
Success draws competition
Consider, for starters, the intersection of West Capitol Drive and North 124thStreet. Just to the west, on Capitol at 127th Street in Brookfield, stands a Pick ‘n Save, and a highly successful one at that. Just on the Wauwatosa side, Target has added groceries to its store. And next door to it, opened last year, is a new Walmart Market — hoping to succeed in a refurbished building vacated years earlier by Jewel-Osco.
“The Pick ‘n Save on 127th Street is a very high-traffic store,” said David Livingston, whose firm, DJL, specializes in grocery market research. “You want to be near them. For Target and Walmart, it was a no-brainer.”
Like car dealerships or fast food restaurants, positioning your brand and offering a different product, shopping experience and selection near a successful competitor can pay off, as long as the market will bear the traffic — and in this case, it probably still does, there, Livingston said.
But now enters Meijer at North Mayfair Road and West Burleigh Street, across the street from the coming Mayfair Collection retail center with its main drawing card, a Nordstrom Rack store.
The Meijer location is just about halfway between the Capitol concentration of stores and another Pick ‘n Save at 1717 N. Mayfair Road.
“Meijer isn’t coming in to compete with Pick ‘n Save — they’re coming in to replace Pick ‘n Save."
“You have a lot of square footage,” Livingston said. “The Pick ‘n Save south of North Avenue — my guess is that one’s redundant. It has to compete with everyone. I would guess that if they had it to do over, they wouldn’t build that store.”
New players about an equal distance to the south support that challenge. A new Trader Joe’s and a Target with groceries settled in cheek-by-jowl late last year just inside Brookfield, straddling 127th Street on Blue Mound Road.
“Trader Joe’s is probably the highest performing store in the country, in terms of sales per square foot,” Livingston said. “Trader Joe’s never goes to a bad neighborhood. Again, you’d want to be next to that. Target? No-brainer.”
The rest of Brookfield, particularly on the south side along the mega-retail corridor of Blue Mound Road, has up to now been pretty solid Roundy’s territory, with its Pick ‘n Save and Metro Market banners dominating.
“You’ve got Sendik’s up on Capitol, but that’s pretty far out, not really part of this corridor,” Livingston said. “On Blue Mound you’ve got Graasch’s, but other than that it’s pretty much lined with Pick ‘n Saves.”
So is that solid for them?
“No,” Livingston said. “I won’t be surprised to see a Meijer come in there, too.
“Meijer isn’t coming in to compete with Pick ‘n Save — they’re coming in to replace Pick ‘n Save. It’s all going to even out. The market can’t support this amount of square footage. Something’s got to give.”
“Meijer will pretty much cap it out,” Livingston said. “More than one store will close.”
Roundy's portion of the pie
In the Milwaukee suburbs — and the entire state of Wisconsin — Roundy’s Inc. is the self-proclaimed market leader when it comes to grabbing those groceries.
Milwaukee-based Roundy’s operates 161 stores and 97 pharmacies under the Pick ’n Save, Rainbow, Copps, Metro Market and Mariano’s Fresh Market banners.
“I think in the whole Wisconsin market, we are the market leaders,” said Jim Hyland, Roundy’s vice president of investor relations.
In fact, Hyland said, the company is now focusing most of its expansion efforts outside Wisconsin in the Chicago area. Hyland said the company has been successful with its Mariano’s brand in that market.
However, there’s no denying that Roundy’s is sharing real estate with plenty of other grocers hoping to attract customers in the suburbs. Besides the approach of Meijer, Walmart and Woodman’s have all aggressively expanded in the suburbs.
Hyland says that’s all just part of the business, and it can’t steal Roundy’s focus on what it does.
“The grocery business is robust, and we get new competition all the time,” he said. “We are aware of it, and we focus on the consumer and their experience rather than the competition.
“There will always be competition in this business. But we try to keep our focus on leadership, our brand, and a better customer experience.”
Roundy’s has also opened its own version of the supercenter in Menomonee Falls and on 76th and Good Hope Road in Milwaukee, said Roundy’s spokeswoman Vivian King.
“The bottom line is that the suburban customer wants convenience,” King said. “They may shop once a week, and we want to provide one-stop shopping for customers.”
Meijer prepared for competition
For its part, Meijer sees it much the same way, a spokesman said.
“Our offerings will be something that shoppers in the Milwaukee area will like,” said Frank Guglielmi, director of public relations. “We have everything from urban sites to stores that are out in the country.
“We’ve developed a format that does well in a lot of different markets, but it’s always based on serving the customer," he added. "There are a lot of different offerings out there at every level from price-point leaders to the most upscale. And there’s competition at every level, but ultimately the winner is the customer.”
“Competition is good for everybody,” Guglielmi said. “We’re in markets now where there’s a lot of competition – we’re in Detroit, we’re in Chicago. It keeps our game up. We are used to competing in the private marketplace, and we’re good at it.”
Saturated near Menomonee Falls, too
Meijer is also opening a store in Sussex, which Livingston sees as a slightly different move than the one in Wauwatosa. Meijer will compete head-to-head in the community with only a Piggly Wiggly nearby, but a Costco store in Pewaukee will be its natural rival.
It could be still to come, but Meijer may be taking a pass Menomonee Falls for now because that market is already full of new stores. The state's largest village, by geographical boundaries, is home to Pick'n Save, Super Pick'n Save, Woodman's, Piggly Wiggly and a newly constructed Walmart Nighborhood Market. Furthermore, a Walmart Supercenter opened within the last five years just a five-minute drive north on Appleton Avenue in Germantown, and an Aldi sits between Falls and Germantown on County Line Road in that area.
“In Menomonee Falls, Pick ‘n Save overbuilt,” Livingston said. “Woodman’s came in and is really making an impact. Then you have a Walmart superstore in Germantown, and now a Walmart Market (in Menomonee Falls).
“People in Menomonee Falls don’t have to go far to get groceries.”
Besides Wauwatosa and Sussex, Meijer is also coming to Grafton, Franklin and now Oak Creek — five stores in one new metropolitan market. It’s a lot from a privately held chain that since 1962 — when Meijer invented the supercenter concept — has amassed only 200 stores so far.
But Guglielmi said the company was well-positioned to enter Milwaukee now.
“If you look at our geography, we’re already strong in Northern Illinois,” he said, “so we’re not that far away. It’s been well-publicized that we’ve bought the new distribution center in Pleasant Prairie.”
With that purchase, Meijer could be in position to announce even more stores, as Livingston predicts they will. Besides the possibility of a Brookfield location, a Pewaukee store has been rumored, but not confirmed by Meijer.
CBRE commercial properties broker Peter Glaser said that for Roundy’s, major competitors — nationals like Walmart and Target and major regional like Meijer — “haven’t been in this market (before), and they see this as a natural progression to enter the suburban market.
“When you have someone who is dominant in the market, there will always be other brands that want to get in.”
“Grocery store development is probably one of the most active categories of retail right now.” Glaser said. “I’m seeing a mix right now. We see the upscale, smaller sized concepts and more large-scale discount stores. However, we’re not seeing a ton of growth on the traditional 55,000-square-foot store.”
Something like it has happened before, Livingston said, although on a more local scale. Kohl’s was once a major player in the Milwaukee grocery market. But in the early 1990s, Roundy’s made a move to capture unquestioned dominance.
Kohl’s went out of the grocery business for good, and most its stores became Pick ‘n Saves.
Carole
9:56 pm on Thursday, January 17, 2013
Woodman's!
GPKWH
8:46 am on Friday, January 18, 2013
I agree Woodman's. The credibility of this article is highly questionable since they left out this major player in the Milwaukee/ S. Wisconsin market.
Fred Wordell
12:39 pm on Friday, January 18, 2013
Woodman's AND Trader Joes.
Jim Price
5:10 pm on Friday, January 18, 2013
@GPKWH, Woodman's was indeed mentioned in the article as a player in the crowded market of Menomonee Falls – mentioned twice, if you're counting.
Jim Price
5:35 pm on Friday, January 18, 2013
@GPKWH – Whoops, I have to correct myself. Woodman's was mentioned THREE times in the article.
Dicks Deli
8:51 am on Sunday, January 20, 2013
I think GPKWH was referring to the survey, although he/she wrote "article". And leaving out Woodman's is a serious omission.
"This is not a scientific poll" When the most uppity chain, with less than half the market share, gets more votes than either the market leader (Pick 'n Save) or the national leader (Walmart), one wonders if respondents are being truthful. Perhaps there could have been a second question, "Where do you buy groceries most often?"
Janis
10:24 pm on Thursday, January 17, 2013
Woodman's for sure!
Joel Kopischke
10:40 pm on Thursday, January 17, 2013
Outpost, our COMMUNITY-owned Cooperative!
Lauren F.
6:52 am on Friday, January 18, 2013
Outpost
Ray Ray Johnson
7:02 am on Friday, January 18, 2013
How dare you leave out Metcalf's Sentry. It is the nicest store in Wauwatosa, staffed by the nicest people. Their prices are as good or better than anyone's and their produce section sets them high above any other grocery store in town. Ever been there on a Saturday? They have their vendors there to meet people and pass out samples and it's got the feel of an open market. Support them instead of Big Mall food.
Lauren F.
7:18 am on Friday, January 18, 2013
I agree, Metcalf Sentry is great too.
Matthew Schroeder
9:05 am on Friday, January 18, 2013
Ray Ray: We did include Metcalfe's Sentry on the map but we didn't want to put every option in the poll -- that's why we included "other" and you did just that!
Linda Mulholland
12:39 pm on Friday, January 18, 2013
Agree! We love Metcalfe's and we're one of your local vendors sampling on those bustling Saturdays! Thanks for shopping local! :)
pupdog1
1:54 pm on Saturday, January 19, 2013
The Sentry name goes back over 100 years in this town.
Michele Divelbiss
7:03 am on Friday, January 18, 2013
We had Meijer when we lived in Indiana. They were right across the street from Wal-Mart. We shopped at the Meijer most often. Now I shop at Target and Woodman's, but my husband has found the new Neighborhood Market from Wal-Mart very convenient for after work quick stops. I guess we're equal opportunity shoppers.
Menomonee Falls resident
11:53 am on Friday, February 1, 2013
Woodman's for sure. I've been to Meijer's in IN many years ago and what I liked about them was that you could get double shopping done - food and other goods. Wondered at the time why no other stores did that. Then along came Walmart and saturated the market. Walmart in Germantown is horrid - indifferent cashiers, filthy surroundings, badly stocked goods and obnoxious shoppers. Now I shop almost exclusively at Woodman's for regular and hard to find food items, and Sendicks for meat. If I need other items, I will still go to Walmart, but at 7:00 AM, before the loonies are out. I will not drive to Sussex in order to shop at Meijers. In addition, Meijer's pricing several years ago was a bit more expensive. Not sure what their pricing is like now.
Ray Ray Johnson
7:16 am on Friday, January 18, 2013
And yes, Outpost is great, except for the prices. Their homemade sausages are some of the best in town. Metcalf's Sentry also sells an excellent variety of organic veggies at prices better than Outpost's. Metcalf's also sells locally made products like Purple Door Ice Cream as just one example. I bought some frozen sweet corn there from a local farmer a couple weeks ago that was like dessert. They also sell beer from many local small brewers, and Alterra coffee. As for the deli...please...no other store in Tosa can compete with the quality, selection or service.
Elayne Meyers
7:32 am on Saturday, January 19, 2013
Outpost all the way - and I don't agree about the prices. I'm glad we have a strong co-op in area. It says something good about our community that we want to support truly local businesses and not big box stores that aren't even from here!
Dicks Deli
4:55 pm on Tuesday, January 22, 2013
Outpost is full of questionably healthful and fake environmentally and farmer-friendly products that, combined with their silly business model and outasight prices is testament to the fact that they've been unable to expand beyond a few stores. One wonders how much of their revenue is derived from the dupes who are dumb enough to become contributors (which they call "owners".)
I went in to an Outpost once. It smelled like Madison. I left.
Impeach Now
7:21 am on Friday, January 18, 2013
I hope they put a massive dent in walmart's bottom line. I wouldn't shed a tear if they closed all the walmart stores the Falls...
Nuitari
8:19 am on Friday, January 18, 2013
Dave said it first. I second that.
Michael McClusky
7:36 am on Friday, January 18, 2013
I hope Walmart collapses all of the way back to Arkansas!
cindy wisconsin
7:54 am on Friday, January 18, 2013
Sendik's is #1 in our family. We love the Manager Kevin & his entire staff. Great sales & prices are good on non sale items - much lower than Pik n Save. Yes it can be crowded when it's busy but it's worth it. We also like Metcalfe's Sentry (they bring in a lot of local products & Andy in the meat department is like the old fashioned, custom butcher - he takes special orders!) & Outpost for some items too. Trader Joe's is a great addition - now we don't have to run up to Bayshore. Competition brings consumer choice & keeps all the stores working to do their best and find their niche. I think all of these grocery stores & their nice "convenience" foods will "eat" in to some of the fast food places. WE are sooooo fortunate to live in Tosa and have these wonderful choices.
PH
7:55 am on Friday, January 18, 2013
Sendiks and Woodmans! I'm not a supporter of Meijers coming in but if it puts Pick n Save out of business, I'm all over it!
Nuitari
8:20 am on Friday, January 18, 2013
Stomp out Pick n Save's high prices that compensates their union.
Janis
9:58 pm on Friday, January 18, 2013
I agree about stomping out P&S. They got greedy after Jewel left town.
Barb H
8:29 am on Friday, January 18, 2013
I am a shopper of Metcalfe's Sentry. Their prices are a bit higher on some things, but they usually carry everything that I want. I have gone elsewhere if I have the time, but Sentry is my "go to" store.
J Borch
9:10 am on Friday, January 18, 2013
I like Woodman's and Aldi. Both have great prices and staff. I moved here from Ohio a few years ago and was beyond disapponted with Pick N Save. Their prices are high and the quality of their produce and meat is mediocre at best. I do not like what Walmart stands for or the way the way they treat their employees. Out with Walmart and Pick N Save. I would love to see Meijer help with that process and I would shop their for sure!
Carl Engelking
9:59 am on Friday, January 18, 2013
I'm a Woodman's shopper out here in Falls. They also have a lot of unique food items, and a great ethnic foods section.
Resident
10:47 am on Friday, January 18, 2013
Interesting that this article seems to think only MF is saturated. Sussex has 2 grocery stores within the village plus 2 Pick n' Saves, 2 Aldis, 2 Walmarts, Costco, Target and others within a 5-7 mile drive! Seems to me we DON'T need another big box store.
Pat Mitchell
11:12 am on Friday, January 18, 2013
Woodmans
John T. Pokrandt
11:16 am on Friday, January 18, 2013
I live on the east side of Tosa and shop most often at Metcalfe's (fantastic store) followed by Outpost and Sendik's. I avoid Pick& Save because their State Street store is so understaffed that checking out takes forever. I doubt I will shop at Meijer's or Walmart, there's no reason for me to drive across town for the big box grocery experience.
Elizabeth Schuetze
11:24 am on Friday, January 18, 2013
WOODMANS, WOODMANS, WOODMANS !!!
James Brundage
11:56 am on Friday, January 18, 2013
Woodmans is my wife's & my favorite store. They have all our favorite brands and they are priced lower than anyone else!
NK
12:09 pm on Friday, January 18, 2013
love metcalfe's sentry. otherwise, our groceries primarily come from trader joes, occasionally target and outpost.
Linda Mulholland
12:36 pm on Friday, January 18, 2013
Shop Local! Here are my favorite's in no particular order -Grasch Foods, Metcalf'es, Outpost, Good Harvest Market and Sendiks!
Steve ®
1:58 pm on Friday, January 18, 2013
Women's work is no place for a guy like Steve®
Pear 1
2:11 pm on Friday, January 18, 2013
“On Blue Mound you’ve got Graasch’s, but other than that it’s pretty much lined with Pick ‘n Saves.”
- I thought the guy being quoted was supposed to be an expert on grocery stores in the area. Grash's (only one "a") is on North Avenue, not Bluemound. That said I agree about the overabundance of Pick 'n Saves- Given their understaffing, their under ordering (Consumer Reports ranked them as last among regional grocery stores in the category of having sale items in stock), and the chain's general disregard for its customers (swipe cards AND coupons? Give me a break.), I think it's only the fact that there seems to be a P&S on every corner that keeps them going.
Katie Mescher Glafcke
2:43 pm on Friday, January 18, 2013
Far and away Aldi is where we buy our groceries. Best prices and no coupons required.
KKP
2:56 pm on Friday, January 18, 2013
Hoo-boy...tough question...I'm sick to death of Pick & Save and Metro Market, whose prices have skyrocketed in the last few years. Used to be they were a good deal - not so anymore.
I love Sendik's on Capitol and Brookfield....but can't afford to do ALL of my grocery shopping there...love their produce there, however, and get all of my produce there now.
Woodman's....too darned big. AND, when the one in Menomonee Falls opened up, I was there during their first week, and every produce bin that I reached into had rotting produce in it - I have not been back. If their produce is rotting in their first week, I don't want to know what it's like now.
I settle for Metro Market...but would love to see some competition thrown into the mix - something that could possibly bring some competitive, realistic pricing.
Carl Engelking
3:03 pm on Friday, January 18, 2013
How far are you all willing to travel for groceries?
Janis
10:01 pm on Friday, January 18, 2013
As far as necessary. When Woodmans first opened in Kenosha we drove the 50 miles each way. We came out far ahead even when gas was $4/gallon.
Jim Kube
4:02 pm on Friday, January 18, 2013
My wife and I typically shop and cook together, and we both enjoy Woodman's.
She's vegan (allergy reasons), and Woodman's has a great selection of items she can use.
Luke
7:42 am on Saturday, January 19, 2013
Woodman's and Sendik's
pupdog1
1:41 pm on Saturday, January 19, 2013
Pick 'N Save on State St. would be fine until you get to the checkout lines, and find out that there are 28 other customers trying to get through the two available lanes. If these Meijers cats can put P 'N S out of business, that would be a very good thing.
The Sendiks on North used to be horribly congested because they put endless display crap in their already tiny isles. They were also way overpriced, with nothing ever on sale. Then they got rid of all that crap blocking the isles, and they now have extremely good prices and lots of stuff on sale. They also have by far the best checkout service--I was there the other night and had three checker-outers wanting my business. And their meat and fresh produce are vastly superior.
I highly recommend Trader Joes. Shopped there for 20 years in the second store they ever opened in S. California. All kinds of fabulous house brands that aren't loaded with tons of chemicals that you can't pronounce.
pupdog1
2:00 pm on Saturday, January 19, 2013
There is another factor... keeping the money local and ending the big box store stranglehold.
That means Outpost, Sendiks, and Metcalf Sentry.
As much as I love Trader Joe's, it is owned by the same German billionaire brothers that own Aldi's.
Nancy Hall
3:37 pm on Tuesday, January 22, 2013
I vote "other," mostly because I don't shop in just one place. I prefer Sentry and Bunzel's for meat, Sentry and Sendik's for produce, and the place with the lowest prices for dairy products and for processed foods like packaged bread, peanut butter, etc.
More and more, I find myself turning to Target for the basics. Their prices on bread, bottled spaghetti sauce, condiments, canned soups, etc. usually beat Pick 'n Save even when double coupons and Pick 'n Save store coupons are factored in.
I've tried Aldi, but have wasted too much money on bad food from Aldi to shop there on a regular basis. I shopped at Trader Joe's when I lived in L. A. and will shop at the new Brookfield store for the same kinds of items I bought there...coffee, cheese, wine, and bread. Their meats and processed foods tend to be of uneven quality, much like the offerings at Aldi. The produce at the Brookfield store looks pretty good, so I'll probably add that to my TJ's list.
I do try to buy local when I can. I support Outpost in principle, but it's overpriced. I just can't afford to shop there. I would join a true food co-op if we had one in Wauwatosa. I'll do the farmer's market in the summer. I've thought of buying produce through a CESA, but the quantities are daunting.
I will probably check out Meijer's when it opens. It sounds like it will be an alternative to Target, which offers good prices on non-food items like pet food and toiletries as well as decent food prices.
Ray Ray Johnson
4:08 pm on Tuesday, January 22, 2013
I had to look up CESA, and the best I can see is that it's a buying co-op for WI public schools. I once tried driving all over town to save money on groceries. I actually saved $15 on $80 worth of groceries. But I spent $16 on gas, thereby netting a $1 loss. Then I bought milk at the gas station.
Mike B
8:18 pm on Thursday, January 24, 2013
Pick n Save has gotten too comfortable sitting back on their laurels lately. The prices have started to rise and the quality has dropped significantly. I'm glad Meijer wants to enter the market. Maybe PnS will realize that they can't just sit back and do nothing. They have to innovate and get better products.
The "Health Food" and "Clean Eating" ways of life are growing at a rapid pace. Most of those people don't shop at PnS because you can't buy any "real" food at those stores.
Pat Rierson
10:19 pm on Thursday, January 24, 2013
Graschs......that one on North and Lilly!! Their meat counter is an authentic meat counter with friendly, real butchers who actually butcher meat.
High standards for the produce on their displays and less over packaging of produce than many grocery stores. Friendly and helpful.
Lisa
6:57 am on Tuesday, March 26, 2013
My favorite is Woodman's but there isn't one close enough to me to shop there regularly yet. I do like Pick n Save, Piggly Wiggly and Aldi combined as 2nd choices. I do double coupons at pick n save to end up with free things sometimes and this really helps the budget. Aldi and Woodmans are good for everyday low prices.