Small grocery store owners are deeply concerned about their livelihoods since big retail chains such as BJ’s Wholesale Club and Wegmans continue to open additional branches in the Greater Boston neighborhoods.
The presence of new competition is quite daunting to small grocers battling it out with large companies to gain market share.
For instance, Stop & Shop is the most successful grocery store in the Northeast region, with about 12.35 percent of the market share. Dave’s Marketplace at Rhode Island, which is the largest independent grocery store, controls only 0.07% of the Northeast market share, as claimed by the Griffin Report of Food Marketing.
Increase in competition within the local market
According to the director of the retail finance division at Wells Fargo Adam B. Davis, the local market has become increasingly competitive of late. “Some independent grocers will have to constantly fend off the big retail chains,” says Davis. “These small grocers need to be mindful on who their clients are and keep providing value.”
Stores should provide customers with a variety of unique items
Very soon people who regularly shop at Shapiro’s Baza could change their minds and go to a bigger chain such as Wegmans, which is filled with many food counters serving a wide range of foods and advertising it on huge sign stands.
The new competitor might subsequently have a pharmacy, liquor store or perhaps a coffee shop. The store may be small for a Wegmans but still overshadows the 15,000 square feet which Baza occupies at Newton.
Shapiro claims that his store has risen to the occasion and competed with rival food stores for the past six years by offering European foods that his customers cannot find at any other store.
Meanwhile, Tropical Foods owner was bummed to learn that BJ’s Wholesale Club was contemplating on opening a store in Boston that will be located about half-a-mile from his store. They intend to open a 90,000 square foot grocery along Tremont Street come 2017.
Tropical Foods, just like Baza, caters to many ethnic communities. They sell foods from Africa, South and Central America, the Caribbean, and many more traditional groceries.
Regardless of the diverse variety of foods, about 80% of the store’s sales are obtained from staple items that all other stores sell, such as eggs, milk, sugar and bread, claims Ronn Garry Jr., who is the president of the store.
Lowering the prices on staple items to cope with competition
A retail chain such as BJ’s can be able to buy in greater bulk than the Tropical Foods store and most likely offer lower prices on the best-selling groceries. Garry also says that it would be quite difficult to survive if he surrendered those sales to their competitor BJ’s.
If you’re interested in this subject, read another example how small grocers are banding together to change food retail for the good.