Some markets have too many grocery stores.
Consumers like the selection and may have favorites for different needs, but even big markets can only support so many chains. When too many stores launch, sometimes multiple stores can choke to death, not getting enough business to survive.
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In a healthy market, that might mean an area that has for or five grocery store options might end up with only two or three, even though three of four could be supported.
There can be too much of a good thing and give a town or city a regional grocery chain like Kroger fighting alongside a more local brand while also competing with a Walmart grocery store, a Whole Foods, a Trader’s Joe’s and a Fresh Market, and usually, something has to give.
There are many areas, however, where only a single grocery store or supermarket serves the community. When that store closes, it’s a disaster.
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Some residents lose, or end up with very limited access to fresh food and product while others have to travel much farther to meet their basic needs. In many cases, it’s not big chains abandoning smaller markets.
Instead it’s local chains failing and leaving food desserts in their wake.
Regional grocery chain files Chapter 11 bankruptcy
West Brazos Stewart Food Markets operates a chain of grocery stores and food markets in Brazoria County, Texas, providing local communities with fresh produce, groceries, meats, and household goods. The regional grocery retailer has filed for Chapter 11 bankruptcy protection in the Southern District of Texas.
That’s a stunning blow to those communities where the family-operated chain has a deep history
“Leading three generations of meat experience, Vernon Stewart started working in the Meat Department at Parker’s grocery store in 1947, waiting the counter at 11 years old. Vernon became a leading market manager in his early 20s, running the meat market for Fur Foods, O’Bannon’s and Blount’s before going into business for himself in 1975,” the company shared on its website.
That led to the business becoming a sort of family tradition.
“Following Vernon’s footsteps are his son Dwain since 1976, grandson Shane since 2002 who is the current market manager for both stores and waiting his turn to learn the trade, his great-grandson Cayden,” it added.
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The company does business under several names including Stewart’s Food Store #2, Stewart’s Food Store #4, Stewart’s Food Market, and Stewart’s Grocery. It listed assets between $10M-$50M and liabilities between $1M-$10M, with approximately 200-999 creditors.
Stewart Food Markets has retained Genevieve Graham Law, PLLC as bankruptcy counsel.
Stewart’s continues to operate
The Stewart’s locations continue to operate and the bankruptcy filling did not contain any information about funding for the Chapter 11 bankruptcy process.
And while Kroger has been the biggest company in the news closing down grocery store locations (about 60 under a variety of brand names), the chain has not been alone in shutting down grocery stores.
Giant, for example, closed one store under its own name and 32 under the Stop & Shp brand. Safeway also closed a handful of under-performing stores and even Amazon has closed some of its Amazon Fresh grocery locations.
These are just a smattering of the chains that have closed stores. That may be in part to consumers pulling back spending in traditional grocery stores.
Dollar General CEO Todd Vasos recently shared that his chain has seen some business from wealthier customer who traditionally shop at supermarkets.
“During our recent customer survey work, 25% of DG customers reported having less income than they did a year ago and nearly 60% of our core customers noted that they felt the need to sacrifice some necessities in the coming year. While our core customer remains financially constrained, we have seen increased trade-in activity from both middle- and higher-income customers,” he said during the company’s first-quarter earnings call.
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Dollar General DG often has cheaper prices on items than grocery stores, but a higher price overall based on the size item you are buying. Basically, you get what you need for less money, but you also get less item.
“Our data shows that new customers this year are making more trips and spending more with us compared to new customers from last year, while also allocating more of their spend to discretionary categories. We believe these behaviors suggest that we are continuing to attract higher-income customers who are looking to maximize value while still shopping for items they want and need,” he added.
Great Job Daniel Kline & the Team @ TheStreet Source link for sharing this story.
