Supermarket scene stable, competitive in Seattle

07/07/2011 09:42:00 AM
Dan Gailbraith

SEATTLE — The retail market is incredibly competitive in the Pacific Northwest, said Ernie Spada Jr., owner of Duck Delivery and United Salad Co., Portland, Ore. Travels throughout the country have convinced him that Northwest retailers rank near the top in their produce departments.

“This is known as a tough market,” he said. “Nobody is finding easy selling and everybody is fighting for market share.”

Only marginal changes were noted in the Seattle retail grocery market in 2010, according to market share figures provided by The Shelby Report.

Safeway held down the top spot in the Seattle market, with a market share of 29.5%, up 0.4% compared with 2009.

Quality Food Centers saw their market share slip by 0.1% to 14.6% while United Grocers’ share of 10.7% was off by 0.2%. Fred Meyer, Albertsons and Wal-Mart were closely bunched, with market shares of 10.1%, 9% and 8.2% respectively.

WinCo, with a 2.7% market share in 2010, is one of the few chains expanding in the Northwest, said Ron Escene, manager of Botsford & Goodfellow in its Federal Way, Wash., office. WinCo offers an extensive range of low end volume items, he said, including bin corn, bin potatoes and other bulk produce. One retailer expanding in the Northwest is WinCo Foods, based in Boise, Idaho. The firm operates more than 60 discount stores and three distribution centers in Washington, Idaho, Nevada, California and Oregon.

Eric Schindler, with Peterson Fruit Co. Inc., Mukilteo, Wash., said the discount supermarket WinCo is a tough competitor against lower-end independent grocers.

WinCo and Wal-Mart have made strong pushes in the market in recent years, Spada said.

Northwest U.S. consumer spending on fruits and vegetables is above the national average. In 2007-08, the most recent year statistics are available from the Commerce Department, residents of Seattle spent an average of $750 on fruits and vegetables, compared with the U.S. average of $628.

Retailers are looking to be noticed, produce operators said.

John Janker, director of category management for Charlie’s Produce, Seattle, said his firm is able to offer local produce items to independent retailers in the region looking to differentiate themselves.

“We’re all trying to find that niche again, that niche grower, that niche commodities that our independents can hang their hat on,” he said.

At the transaction level, Escene said retailers are increasingly going to online systems like Foodlink and iTrade for Safeway, Albertsons, Winco and other chain. “Buyers can send the orders through these systems,” he said.

“You can look at your orders without talking to the buyers.”

The vendor management style is gaining influence, he said, even though such systems are difficult with perishable products.

Relationships with retailers have changed over the years.

“All of our buyers used to be here,” Escene said.

“Now our buyers are in Cincinnati and they buy for the whole country,” he said. “They are looking at what they did last year.”

On the other hand, buyer-seller interaction hasn’t changed a lot for wholesalers, he said. Escene said he speaks to wholesalers three or four times a day.

The Pacific Northwest was home to 1,529 grocery retailers and 675 wholesalers in 2008, according to a comprehensive market report from Agri-Food Canada about the Pacific Northwest grocery market. Total retail food and beverage store sales equaled $28.7 billion in 2008.

The Costco Wholesale Group is based in Issaquah, Washington, and boasted the fourth-largest sales in 2007 of U.S. supermarkets and grocery chains. Meanwhile, Albertson’s LLC, of Boise, was 16th and WinCo Foods was 29th.



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