By RICHARD MULLINS | The Tampa Tribune
http://www2.tbo.com/content/2010/mar/25/aldi-other-discount-grocers-rushing-tampa/news-breaking/
For Karen Lang, Peanut Delight peanut butter is just as good as Jif, only better because it's half the price.
Lang used to be a dedicated Publix shopper. "I almost never went anywhere else, I was so exclusive to Publix," Lang said. Then the economy tanked, and she now proudly strolls the aisles of Aldi, stocked as they are with brands like Corntown popcorn and Mr. Pudding chocolate pudding.
"Five or six year ago, we were all about keeping up with the Jonses," she said. "Now my grocery bill is almost half what it was. Of 10 items in my cart right now, each one is more than a dollar cheaper than at Publix. And this is good stuff."
She does a quick tally, and finds her grocery savings could top $50 to $80 a week, or $4,000 a year. "Add that up over 10 years and I could buy a $30,000 to $40,000 CD for retirement."
For the time being, four big grocery chains still dominate the local grocery market: Publix, Walmart, Sweetbay and Winn-Dixie.
But as the economy trains a new generation on frugality, growing ranks of shoppers like Lang are one big reason a slew of new, discount grocery chains are rushing to build new, smaller stores in Tampa Bay, stocked with lower-priced items.
Some are deep discounters like Aldi that sell their own brands. Others like Save-A-Lot and Family Dollar are adding more groceries to shelves in their small-footprint stores. Others like Gordon Food Service offer lower prices by selling products in huge sizes, such as 25-pound bags of flour or gallon containers of mustard.
"Every grocery that we have talked to in recent months has talked about how shoppers are 'trading down' to store brands, less expensive meats, etc., in an effort to save money on groceries," said Lorrie Griffith, editor of the Shelby Report on the grocery market.
That's created a boom in business for discounters like Aldi and volume stores like GFS, she said.
Aldi
For discounters like Aldi, much of the growth comes from a self-professed obsession with efficiency.
The German-owned grocer hires food companies to custom-make huge volumes of just a few items at a lower price. Instead of 15 varieties of pasta sauce, Aldi stocks three flavors. There are two kinds of peanut butter and just a few flavors of cola. Ninety-five percent of products are exclusive to Aldi, though they're similar to national brand names.
Golden Cremes (aka Twinkies). Aunt Maple's syrup (aka Aunt Jemima). Chocolate Waves (aka Oreos). Thin Wheats (aka Wheat Thins). Often, these alternate brands are made by the same companies that manufacture the national brands or private-label store brands at Publix and Target.
"We aim to have our prices about 25 percent lower than Walmart, and 40 percent less than Publix or Sweetbay," said Aldi district manager David Rinaldo. "And so far, Florida has been very good to us."
Though brands aren't exactly comparable, The Tampa Tribune and TBO.com's weekly market basket of 30 sample items cost $48.09 at Aldi, $63.86 at Walmart, $68.47 at Target, $77.12 at Publix, $69.59 at Sweetbay and $78.94 at Winn-Dixie. Some items weren't directly comparable by brand or size, though most were.
Aldi operates relatively small, 10,000-square foot stores, about the size of a CVS pharmacy. Products are stacked by the hundreds on shipping pallets with little arrangement, meaning no employees stacking products.
Customers place a quarter in the cart as a deposit, returned when they return the cart. And customers bag their own groceries, buying 10-cent bags if they like.
This means Aldi may only have two to four employees in their stores, compared with a Publix, which may have a dozen or more to staff their larger stores. Aldi takes no credit cards. Only cash, check or debit, saving the roughly 3 percent fee on credit-card processing.
"All that savings, we channel back into lowering the price customers pay," Rinaldo said.
Aldi already has five stores in the general area. A new spot opened in Brandon this month, and others have signed leases in Carrollwood, Bradenton, New Port Richey and Seminole. Plans could change, but Aldi could build another half-dozen next year, Rinaldo said.
Gordon Food Service
For its business model, Grand Rapids, Mich.-based Gordon Food Service focuses on bulk sizing, sold in small stores.
Generally a supplier to restaurants, schools and churches, GFS has put three Marketplace locations in the Tampa Bay area to focus on individual families who like buying in bulk.
Cereal boxes generally are twice the size of those found at Sweetbay or Publix, if not four times as big. Some spices come in half-gallon size containers. GFS sells a gallon-size of Crown yellow mustard for $4.49, a 7-pound container of its own brand name vanilla pudding for $4.49 and a 25-pound sack of flour for $7.49.
Customers can bring their own bags or stack groceries in the same cardboard boxes used to deliver products to the store.
Perhaps it was the collapse of the real estate economy or the demographics of Florida's population, but "Florida seems to be one of the places our stores are doing extremely well," said Suzette Murchison, marketing coordinator for GFS.
So well, in fact, that GFS bought a large distribution center from Albertsons in Plant City. With nine stores in Florida, Murchison said GFS could build another three each year in the Bay area for the next several years. The next location opens this May on North Dale Mabry Highway in Carrollwood.
Family Dollar
Dollar stores are adding more grocery items to their shelves.
Family Dollar Stores Inc. of Matthews, N.C., already has 370 stores in Florida, including more than 30 in the Tampa Bay area, with leases on three more set to open soon.
Normally, Family Dollar focuses on its core customer: A female head of household with children at home and earning less than $40,000 a year, spokesman Josh Braverman said.
But Family Dollar has expanded that perspective somewhat and is adding more food choices to the racks of dollar-priced cans of hair spray, dish soap and other disposable items.
Recently the chain added more refrigerated spaces and brand names like Cheerios and Oreos, Braverman said.
"We even have frozen shrimp now," he said. "We know we're never going to take the place of that stock-up-on-everything grocery trip. But if you're looking for eggs, milk, cheese, dry cereal and in brand names, we want to be that place you can run in and run out."
Comparing prices, Family Dollar was less expensive than Walmart on some items in the Tribune's weekly market basket of 30 items, more expensive on other items.
Campbell's cream of mushroom soup was 56 percent less at 50 cents a can. Wheat Thins were 16 percent less at $2.50 per box.
But bacon, coffee, pasta sauce, spaghetti, Hamburger Helper and Cheerios were between 10 percent and 30 percent more expensive than Walmart. Eggs were 82 percent more expensive, at $2.15 per dozen.
Dollar Tree
Rival store Dollar Tree plans a dramatic expansion nationally and will add 220 new stores to its current list of 3,806. Details aren't public yet, but that expansion will include adding to the roughly 35 stores in the Tampa Bay region.
New stores, and some existing ones, will add refrigerated and freezer sections to have more grocery choices, spokeswoman Shelly Davis said.
"We'll have not just chips and snacks like we already have," Davis said. "But you can run in and get a frozen pizza."
Save-A-Lot
For a time, most discounters focused on lower-income areas, including Save-A-Lot stores. But spokeswoman Maureen Shannon said her chain has started doing well in more affluent neighborhoods.
That's one reason Minneapolis-based Save-A-Lot plans on doubling its national footprint of about 1,200 stores over the next five years â potentially doubling its 109 locations in Florida. (Seventy-five percent are owned by franchisees.)
Four stores will open in Tampa this year.
Similar to Aldi in some ways, Save-A-Lot stores may stock one kind of ketchup, saving space and lowering property costs. A given grocery trip could cost 40 percent less than traditional grocers, the company claims, and the average trip is just 18 minutes.
Comparing prices, the Tribune's market basket of 30 items cost $53.77 at Save-A-Lot, 16 percent lower than Walmart's, though not every item was directly comparable by size or brand.
Save-A-Lot has 25 stores in Hillsborough, Pinellas, Pasco and Hernando counties. The most recent opened in Temple Terrace, just east of Busch Gardens.
About half the brands in a given Save-A-Lot store are generic or private label, Shannon said, including, for fun, brands named after employees. For instance, Shaner's buffalo wings are named after one notable employee, Chief Executive Bill Shaner.