Saturday, September 6, 2008

Grocery Stores Need to Adapt in Order to Survive

Supermarket grocery stores have been a tradition for nearly a century. Americans have made weekly trips to their local super markets to purchase groceries. Things have been changing. Many shoppers have switched to mega-stores like Wal-Mart Super Centers and specialty grocery stores like Trader Joes and Whole Foods.

The first self service grocery store to open was the Memphis Tennessee Piggly Wiggly in the early 1900’s. In 1930 Michael McKullen opened the first supermarket in Queens New York. Within a decade the Atlantic and Pacific Tea Company spread the idea across the country. At that time the chain became the fifth largest corporation in America.

Americans average 2.2 trips to the supermarket each week spending on the average $24.64 per visit. Costco and Walmart are both putting a crimp in the grocery store’s profits. According to a CBS News Poll 6 in 10 Americans buy their groceries at a mega-store now. According to CBS 15 cents of ever grocery dollar is now spent at Wal-Mart.

Albertsons has had to close many of their stores the past few months. They have closed stores in Colorado, California and throughout their market. Sometimes they don’t even give notice of the closures. They might just close the doors without any explanation.

Some analysts predicted that the grocery stores would be forced to close stores. During the recent grocery store strike in California, one of the reasons the store management gave for not capitulating to the unions demands was the increased competition.

With recent news of Albertsons woes, it appears they were right. In the past two decades 10,000 grocery stores have closed their doors. Winn Dixie is in bankruptcy and Albertsons is looking for a buyer to avoid closing their chain.

Nowadays customers demand either super savings or super service. Convenience is not as important to most shoppers anymore. The grocery stores have been trying to reinvent themselves, but they have a lot of catching up to do.


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