ST LOUIS — The retail grocery scene in St. Louis is similar to the anatomy of a world war.
Superpowers such as Wal-Mart and Supervalu seem at first to overshadow the rest of the players, but strong regional companies such as Schnucks, and Dierbergs maintain their status despite a barrage of competition from discount operators such as Aldi.
And then there are the small but steady combatants, such as Straub’s Markets, which has only four stores in the metro area. Straubs’ 110-year reputation of offering high-end meats and produce to a slightly upscale clientele seems to have insulated them, giving it a Switzerland-type atmosphere of status quo despite the grocery wars raging around them.
Greg Lehr, produce buyer and category specialist for Straub’s, said for 2011 the weather has been more of a problem than the economy.
From South America to the Pacific Northwest, growers have struggled with droughts, freezes, untimely rains and uncooperative temperatures.
“Some of our prices have been up because supplies have been down,” Lehr said. “Last week (at the end of July) watermelon was at record prices, and we are seeing a similar situation with cantaloupe and grapes.
“We have taken a hit in margins because of supplies because it’s been so volatile.”
Lehr said Straub’s doesn’t compete head-to-head with big-box or discount stores as do other regional chains, which means they are on more solid footing.
Schnucks Markets is at the other end of the regional chain spectrum.
Schnucks fresh-cut line
With 105 stores in five states, the Shelby Report shows Schnucks as the front runner for market share among local and regional chains with 16.8% of the metro area’s grocery business.
The Shelby Report shows Kroger with 6.8% of the market and Dierbergs with 5.5% as of July.
The Peace of Mind pricing program is at the heart of Schnucks battle plan in the St. Louis grocery war, according to Mike O’Brien, vice president of produce and floral. The campaign is the chain’s promise to customers who responded to surveys by saying that everyday low prices were their top desire.
“When you are in an economy like we’ve been in and still are in, you need to do everything you can to keep customers,” O’Brien said. “That’s what Peace of Mind is about. Bananas are our No. 1 item there.”
In addition to including bananas and other fresh produce in its Peace of Mind program, Schnucks has launched a line of in-house fresh-cut fruit and vegetable products to keep and attract customers. O’Brien said the fresh-cut items target Gen X and Gen Y moms by saving them at-home labor.