The Twin Cities retail market, dominated heavily by Supervalu’s Cub Foods, continues to see more chains breaking into the area.
Trader Joe’s, the natural grocery chain that just hit the Twin Cities market three years ago, has plans to add a fourth store to the cities — in St. Paul, Minn. — soon.
“They’re negotiating a space just 1.5 blocks down from The Wedge,” said Tom Rodmyre, warehouse manager for Co-op Partners Warehouse, the distribution arm of Minneapolis-based The Wedge.
According to its Web site, the proposed location for the new Trader Joe’s is 484 Lexington Parkway in St. Paul. That location is 9 miles from The Wedge, which is in Minneapolis.
So far, Trader Joe’s and Whole Foods have stayed close to the Twin Cities metro. Trader Joe’s existing stores are in Minneapolis, St. Paul and Osseo, Minn. Whole Foods has two locations, one in Minneapolis and the other in St. Paul.
Mass-market stores like Wal-Mart and Target are attracting more consumers and cutting into grocery business, as well. There have been rumors of a new Wal-Mart Supercenter at the loop between highways 494 and 694, but a Wal-Mart representative declined to verify that rumor.
“They have a huge effect,” Rodmyre said. “That’s part of the reason people are being so price-conscious, because you can go into a Wal-Mart or Super Target and buy an organic head of romaine for less than you can at a co-op.”
Retail market share for distribution centers serving the Minneapolis/St. Paul metropolitan area, according to Trade Dimensions International.
With organics, Rodmyre said there is a debate over whether large chain stores should be able to be certified organic without having each of their stores separately certified.
“The organic certification process is good for everybody down the road because we have to be traceable all the way back to the grower, which is huge,” Rodmyre said.
Many of the larger chain stores self-ship, so they have little need for local distributors. The presence of large chain distributors in Minnesota, like Sysco and U.S. Foodservice, are also making it hard for the smaller guys.
“From our perspective, we’re seeing in the marketplace more than ever is two separate camps: the corporate types, who have no need for little independents like us and are more and more gobbling up businesses like us, and our camp, small companies still trying to maintain in the marketplace,” said Paul Piazza Sr., president of Minneapolis-based Minnesota Produce Inc.
Retail shopping patterns have changed, too, with this past year’s slumping economy.
“People are shying away from more expensive food items,” said Adam Gamble, general manager of the North Country Produce division of distributor Russ Davis Wholesale, Inver Grove Heights. “Some retailers are going to smaller size fruit, better price points.”
Discount retailers are gaining market share, Gamble said.
“People selling the most inexpensive produce are selling the most,” Gamble said. “We hope that trend slows down by the end of the year.”
As a wholesaler, North Country Produce has expanded its offerings to appease the demand for lower-priced items.
“We’ve had to bring in a broader range of sizes and price points of products for cost demand,” Gamble said. “We have a very broad range of customers, different categories of retailers.”