retail news in context, analysis with attitude

The Chicago Tribune has a story about how, after a major expansion of grocery stores in the Chicago market after the closing of Safeway-owned Dominick's there in 2014, growth "is just now slowing to a crawl." However, the story also makes the point that this does not mean that competition is slowing - in fact, it may be tougher than ever because of non-traditional venues getting into the food business as well as growth in the online segment.

Here's how the Tribune frames the story:

"Jewel-Osco and Mariano's, which collectively hold more than 30 percent of the market share in the Chicago area, plan to open a combined five stores this year. But with much of the prime real estate already snatched up, there are fewer opportunities for grocery stores to expand.

"Competition will remain fierce. As in markets across the country, Chicago grocery stores are facing steep economic challenges to survive. Some of those challenges, like deflationary food prices, are cyclical and taken in stride. But in an increasingly fragmented industry, shoppers are buying their food from a variety of retailers, including drug and dollar stores." And, "Executives with both Jewel-Osco and Mariano's, which is owned by Kroger, have acknowledged that they're studying e-commerce but have so far been mum on details for their future plans for implementation."
KC's View:
This isn't different from most other markets .... but it is a big one, and the competition is going to be particularly intense. I cannot help but feel that there are going to be players there with images and value propositions that are not distinct and differentiated enough to allow them to survive ...which will mean that they'll either be marginalized beyond the ability to survive or will be acquired for their real estate.

Never stop fighting till the fight is done? It's never done.