“There is an increasing importance on fresh produce,” said Bill Bishop, chief architect of Barrington, Ill.-based Brick Meets Click and Willard Bishop Consulting.
“There is more emphasis on winning produce in this market, and that’s a meaningful change. “It is going to be more common for people to look for ways to stand out and differentiate themselves with produce,” Bishop said.
Besides the exit of the long-standing Dominick’s chain, Bishop said another big change in the market is how the new management of Jewel-Osco has been successful in revitalizing its 200 or so stores, upgrading merchandising and customer service.
“I was surprised by the ability of new management to have a short-term, positive impact on the business,” he said. “It’s making a difference,” he said.
There is no doubt Jewel is trying to change directions, said Anton J. Marano, vice president of sales for Anthony Marano Co., Chicago.
“They are going back to what used to work for them,” he said. “I think they are finding their roots again.”
The exit of Dominick’s and the reemergence of Jewel suggest an uptick in competition, Bishop said.
Jewel-Osco, now owned by the New York-based Cerberus Capital Management LP, has not been making extensive capital improvements to its stores but there are reports the stores are sourcing more local food, and upgrading standards for commodities like berries, grapes and apples, said Dick Spezzano, owner of Spezzano Consulting Service, Monrovia, Calif.
Promotional pricing for Jewel’s is also much more aggressive, Spezzano said.
“They went from being the highest priced now to the leader on promotional pricing,” he said.
Mariano’s raises the bar
Mariano’s, with about 13 stores in Chicago land and more planned in the next years, has stores routinely ringing up sales of $1 million a week.
T.J. Fleming, director of sales for Strube Celery and Vegetable Co., Chicago, said Mariano’s gives the perception of being high-end without high-end pricing.
Other retailers in Chicago have to stand up and meet the challenge, Fleming sad.
Spezzano said he considers Mariano’s the “best in class” in Chicago, with qualities to compare to New York-based Wegmans Food Markets.