Strong retail competition bolsters Philadelphia produce markets

09/08/2009 04:15:09 PM
Doug Ohlemeier

PHILADELPHIA — In the city known for the Liberty Bell, competition among supermarket chains remains fierce.

One produce director for a regional supermarket chain, who didn’t want to officially speak for his chain, said retailers are sweating the increased competition.

“I have never seen it as competitive as I have seen it now,” he said. “There are a lot of new entries in the market.”

Much of the market’s retail growth is coming from chains such as Wegman’s Food Markets Inc., Rochester, N.Y.; Wakefern Food Corp., Elizabeth, N.J.; Shop-Rite Supermarkets, Edison, N.J.; and Giant Food LLC, Landover, Md., he said.

“There are a lot of new competitors entering the market. The old standbys of Acme, Pathmark, Genuardi's, they’re just there. But the growth is coming from those other three and at the expense of the others.”

Distributors and produce sellers say the competition has heated up.

“All of the chains are battling for their market shares,” said Tom Curtis, president of Tom Curtis Brokerage. “It’s in all of the newspapers how they’re battling each other. They’re naming names.”

Curtis said supermarkets in advertisements are increasingly comparing their price savings to their competitors’, saying how shoppers can save $50 if they buy the same items at the advertised store.

One factor has been the increasing presence of Wal-Mart Stores Inc., Bentonville, Ark.

In mid-July, Wal Mart opened a location in Tullytown, northwest of Philadelphia.

According to Wal-Mart’s Web site, the chain has 20 stores in the immediate Philadelphia area, with locations in the southwest part of the city, and in suburbs such as Eddystone, King of Prussia and Deptford, N.J.

Overall, in Pennsylvania, Wal-Mart has 85 supercenters, 41 regular stores, 23 Sam’s Clubs and four distribution centers, according to the Web site.

Curtis said Wal-Mart recently opened a supercenter in Collegeville, northwest of Philadelphia where he lives. The chain doubled the space of a regular store.

“More and more of these are popping up,” he said. “The whole catalyst for this increased retail competition is Wal-Mart. Wal-Mart is just starting to take these chain stores apart. I think you will see a shrinking of the chain stores. They’re having a very tough time competing.”

Ron Carkoski, president and chief executive officer of Four Seasons Produce Inc., Ephrata, which distributes produce throughout the northeast, said that competition has lowered margins for distributor and consumer.

“This retail competition is incredible,” Carkoski said. “Out of all this competition is obvious margin compression. It’s happening all over. Everyone is pushing down on the margin trying to create consumer excitement and enthusiasm.”


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