Grocery Sales by DJPaparazzi

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									Wal-Mart leads D-FW grocery sales
It's the discount retailer's first top 10 market
06:50 AM CST on Thursday, February 5, 2004

By MARIA HALKIAS / The Dallas Morning News

Wal-Mart Stores Inc. has become the No. 1 seller of groceries in Dallas-Fort Worth, taking the lead in a top 10 U.S.
market for the first time, according to data released Wednesday.

While the discount giant has been the largest U.S. food retailer for a couple of years, dominating small and medium-
sized towns such as Rogers, Ark., and Oklahoma City, it has been slower to capture the major markets.

Wal-Mart did it in D-FW against the Big Three – Kroger Co., Albertsons Inc. and Safeway Inc. – along with a host
of others. It took the company about six years to rise from No. 6.

Wal-Mart's market share in the Dallas-Fort Worth-Arlington area is 25.1 percent, according to the 2004 edition of
Market Scope, a publication of TradeDimensions International Inc.

No. 2 is Albertsons with 17.6 percent, followed by Safeway's Tom Thumb with 15 percent, Kroger with 12.7
percent, Minyard Food Stores with 9.1 percent and Target Corp.'s SuperTarget with 3.9 percent.

Albertsons was the leading grocer last year in Dallas with a 19.4 percent share and in Fort Worth-Arlington with
20.3 percent when Market Scope measured the markets separately.

Wal-Mart's ascent was forecast last year when it was No. 3 in Dallas and No. 3 in Fort Worth-Arlington, but the
size of the leap was surprising, some analysts said.

"Everyone was predicting it would happen, but no one expected they would blow past them. I think this is going to
be a real wake-up call to a lot of other retailers," said Mitchell J. Rosenbleeth, vice president at Booz Allen Hamilton
in Dallas.

Wal-Mart's past demographics have been rural and suburban, he said, "but now we're seeing that their advantages
are even more pronounced when they're in urban demographics."

Wal-Mart spokeswoman Karen Burk didn't address the company's progress in the region.

"We focus on building one customer at a time," she said. "It's always going to be our focus no matter where we
are."

Houston's next

Houston is probably the next major market where Wal-Mart will take the top spot.

Kroger is No. 1 with a 24.5 percent share, Market Scope says, but that's a slim lead over Wal-Mart's 23.8 percent.

It is not obvious that one out of every four grocery dollars spent in Dallas-Fort Worth is going to Wal-Mart. Most
area residents do their grocery shopping at traditional supermarkets, which anchor neighborhood strip centers and
stand at major suburban intersections.
"One Wal-Mart Supercenter can equal many traditional Kroger or Tom Thumb stores in volume. So while we don't
see them on every corner, they command a big food share," said Al Meyers, vice president at industry research firm
Retail Forward Inc.

A time-saver

Deshonda Bradford of Dallas said she wasn't surprised that Wal-Mart moved into the top spot.

"The best thing they did was to open Supercenters in 1992. I go there and can get general merchandise and
groceries and write one check. That saves me time."

Dallas was the first top 10 market where Wal-Mart built its Neighborhood Market stores, and before that, its
Supercenters.

"The Supercenter is the single-most-important trend in retailing during the last 30 years," Mr. Meyers said.

The Neighborhood Market concept is being tweaked, he said.

"They'll roll it out when they're happy with it," he said. "Aging baby boomers aren't going to want to plow through
a 220,000-square-foot Supercenter all the time. The Neighborhood Market fills a need."

Wal-Mart has expanded its U.S. grocery and drug sales at an average pace of 17 percent annually over the last five
years, compared with 3 percent for supermarkets and 9.1 percent for drugstores.

Retail Forward predicts that Wal-Mart's U.S. grocery and drug sales will top $162 billion in 2007, compared with
$82 billion in 2002.

In D-FW, 22.1 percent of Wal-Mart's market share is from 43 Supercenters, and 3 percent is from 17
Neighborhood markets.

Neighborhood markets are about 40,000 square feet, or 25 percent smaller than a Kroger Signature Market or a
newer Albertsons store; they are designed to meet customers' needs in between visits to the massive Supercenters.

Including Sam's...

The Market Scope results do not include grocery spending at warehouse clubs, drugstores or convenience stores.
Wal-Mart's total market share probably approaches 30 percent if its Sam's Clubs are included, said Dr. Edward J.
Fox, director of the J.C. Penney Center for Retail Excellence at Southern Methodist University.

Wal-Mart's market share probably will climb as its Neighborhood Markets mature.

"It takes about seven years for a supermarket to ramp up its sales," Dr. Fox said.

Albertsons, based in Idaho, took the Dallas market lead from Tom Thumb in the late 1996.

Last week, Albertsons said it replaced the top executive in its D-FW division and was eliminating layers of
management over its 103 area stores.

The chain, which had been on a fast expansion track, plans to open just one store in the area this year.

E-mail mhalkias@dallasnews.com

								
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