Midwest retail markets show generally strong market share by Walmart, but also very competitive retail performances by other regional chains.
According to Shelby Market Data, the Kansas/Missouri market share for retail grocery (Kansas City; Topeka, Kan.; Wichita, Kan.; Columbia, Mo.) finds Walmart firmly at the top with 33% in March, with Associated Wholesale Grocers supplying 257 stores with a 26.9% share, Dillons (Kroger) with 60 stores at 15.6%, and HyVee with 34 stores and a 10.20% share.
In Iowa (Des Moines, Sioux City and Cedar Rapids), Shelby reported Hy-Vee had a 38.5% share in March, compared with 29.7% for Walmart and 12.50% for Fareway.
In Kansas City, one fresh produce observer said the fight for market share is fierce.
“The competition is pretty stiff out here in the streets when it comes to retailers,” said Anthony Totta, consultant with FreshXperts LLC.
“This town has such strong independent retailers that are trying to keep hanging on to market share.”
Retailers are innovating, especially relative to home grocery delivery.
For example, West Des Moines, Iowa-based Hy-Vee has created a store in West Des Moines that is only a fulfillment center for e-grocery sales and not open to the public.
To facilitate its Aisles Online e-commerce business, the company announced in late 2017 that it plans to build fulfillment centers in Omaha, Kansas City and the Twin Cities in coming years.
“They are heading in that direction with some real intent to deliver the goods and make it happen right,” Totta said.
Wholesalers that are dominating the fruit and vegetable business in the Heartland have all entered into value-added processing and fresh-cut. That has transformed the profile of those companies, Totta said.
Some retailers lean on fresh-cut offerings from outside suppliers, while some, like Hy-Vee, try to do more in-house processing.
“I know of (one) retailer in our market area that right now is making plans to have a local processor do the processing they were doing in store and do it in private label, because they’re all focused on labor savings,” Totta said.
Nick Conforti, co-owner of Kansas City-based C&C Produce, said retailers are looking to differentiate themselves.
“I think that’s going to be key to our traditional retailers, with the Amazons coming in the world, the Walmart delivery,” he said.
“It is going to be really interesting to see where these markets are 10 years from now.”
Looking ahead, Totta said there are rumors that Trader Joe’s could open a new store in Lee’s Summit.
Hy-Vee opened its first HealthMarket store in West Des Moines — with a footprint of nearly 16,000 square feet — this summer. The chain is expected to add two stores next year — one in the Kansas City region and one in Madison, Wis.
The format, a larger version of the HealthMarket in larger stores, features fresh produce, natural and organic foods, vitamins and supplements along with meat and other groceries.
Competitive pressure from grocers like Fresh Thyme and Sprouts have forced Hy-Vee to explore adding more HealthMarket stores, Randy Edeker, Hy-Vee Inc. CEO, told the Des Moines Register.
Totta said Hy-Vee has earned respect in the Kansas City market.
“When Hy-Vee came (to Kansas City), nobody took them serious because all the other chains have not been able to survive here,” he said.
HyVee’s employee-owned business model, combined with autonomous managers at the store level, makes them fierce competitors.
In Iowa, retailers are responding to the need for convenience among their shoppers by increasing foodservice options in stores, with some putting restaurants in supermarkets, said Brendan Comito, chief operations officer for Norwalk, Iowa-based Capital City Fruit.
“Retail trends are all about convenience,” he said. “Grab-and-go is what busy shoppers are looking for.”
More Iowa supermarkets are offering online ordering and store pick-up, Comito said.
With only one Whole Foods location in Iowa, he said Amazon/Whole Foods have the attention of other retailers in the market but have not yet made a significant market impact.
Comito said convenience stores are adding more produce options and produce has been offered at some non-traditional retail outlets such as big box hardware stores.