2015 Top 50: Independent Spirit

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The independent market remains vibrant and growing, as SN’s annual list of the Top 50 Small Chains and Independents demonstrates.

The 10 companies that top the list account for combined sales of $9.95 billion, compared with $8.6 billion for the 10 companies on last year’s list.

Whether urban or rural, the list demonstrates the diversity of the independent operators that serve their respective marketplaces.


FIVE STARSSN profiles five notable independents in the 2015 Top 50

Roche Bros.: Survival through innovation

Northgate Gonzalez: Modernizing stores

Fairway Market: Fresh food with attitude

Redner’s Warehouse Markets: Controlling costs

Festival Foods: Grows naturally


Of the two companies that lead the list — each accounting for $1.2 billion — No. 1 Fareway Stores, Boone, Iowa, serves a less urbanized demographic with 108 stores, while No. 2 Inserra Supermarkets, Mahwah, N.J., serves a more populous base with just 22 stores. (In the case of a tie, retailers are listed in alphabetical order.)

The next two operators — each of whom does $1 billion in sales — also serve diverse markets, with 79-store Marsh Supermarkets, Indianapolis, neck-and-neck with Northgate Gonzalez Markets, Anaheim, Calif. (see related story), whose 40 stores cater to an ethnic Hispanic base.

Moving further down the list, Lowe’s Markets, Littlefield, Texas, was No. 5, with 145 stores serving a variety of smaller Texas communities, while No. 6 PAQ, Stockton, Calif., serves a more populous base in both Northern California and Hawaii.

Coming on strong are two companies of roughly equal size serving very different demographics — Rouses Enterprises, Thibodaux, La., with 46 stores in the New Orleans area, and Vallarta Supermarkets, Sylmar, Calif., with 44 stores serving a primarily Hispanic clientele.

Year-over-year comparisons with last year’s Top 50 are impacted by a change in methodology in SN’s list of the Top 75 grocery retailers in the U.S. and Canada. With the addition of consumable sales at drugstores and  Amazon.com, three chains that used to be on that list now head the Top 50: Fareway, Inserra and Marsh.

The big gainers among the top independents this year were companies that expanded their store count during 2014, including Rouses, which added six new stores; Festival Foods, Onalaska, Wis. (No. 11) (related story), whose volume benefited from new stores opened at the end of 2013 plus two new stores last year; and Harps Food Stores, Springdale, Ark. (No. 17), which opened three new stores; while companies near the top of last year’s list that found themselves running more or less in place were PAQ and Redner’s Warehouse Markets, Reading, Pa. (No. 10) (related story), both of which saw volume dip slightly.

The biggest anomaly in the Top 50 is Bellingham, Wash.-based Haggen — at No. 38, but not for long. If all goes as planned, the 18-store Pacific Northwest operator will acquire 168 Safeway and Albertsons locations across the West when those two giants merge, boosting Haggen into a major regional chain with sales approaching $3.5 billion.

The 14 best supermarkets in America (…and Part II)

farew3C55A2F3D9C6B3B13C18754D2DB9D_h218_w423_m6_ofalse_lfalse_bwhiteFareway

Reader score: 83
Location: Iowa, Neb., Ill., Minn.
Year founded: 1983

This Midwest chain received top scores in service and price satisfaction and above-average scores on cleanliness and perishables. Earlier this year, the company named a new CEO: Reynolds Cramer, who started out as a stock boy on the supermarket floor at age 16.

raleimages
Raley’s

Reader score: 83
Location: Calif. and Nev.
Year founded: 1934

This family-owned chain received the top score on cleanliness and perishables, an above-average score on service, and a below-average score on price satisfaction. Current CEO Michael Teel is the grandson of the Raley’s founder; he ran the company from 1996 to 2002 and returned to the helm in 2010 in an effort to keep the company private.

A Market Basket Supermarket, courtesy of Market Basket via Facebook, www.facebook.com/MarketBasketFoods
Market Basket

Reader score: 83
Location: N.H., Mass., Maine
Year founded: 1962

This New England-based, family-owned discount grocer competes hard for price-conscious shoppers. In January it announced a 4 percent year-long discount for customers.

A Sprouts Farmers Market in Los Angeles © Jonathan Alcorn/Reuters
Sprouts Farmers Market

Reader score: 84
Location:  Ariz., Calif., Colo., Nev., N.M., Okla., Texas, Utah, and Kan.
Year founded: 2001

A newcomer to the list this year, Sprouts Farmers Market (SFM) specializes in fresh and whole-grain foods. With more than 170 stores and 1,400 team members, the chain went public last August; shares have fallen about 20 percent since its market debut.

A shopper pushes a cart outside Costco Wholesale in Danvers, Mass. © Elise Amendola/AP
Costco

Reader score: 84
Location: Nationwide
Year founded: 1983

The warehouse chain received the top score in price and perishables, an above-average score for cleanliness, and a neutral score for customer service. Of course, Costco’s (COST) model minimizes service and quick cashiers in exchange for the deals it can offer customers on a daily basis.

A Publix supermarket © Sean Pavone/Alamy
Publix

Reader score: 85
Location: Fla., Ala., Ga., N.C., S.C., and Tenn.
Year founded: 1930

The largest employee-owned supermarket in the United States, Publix is also the most profitable. The chain was the only grocer to appear on J.D. Power’s list of 2014 Customer Champions, which recognizes outstanding customer service.

A pedestrian walks past a Trader Joe's Co. store in San Francisco © David Paul Morris/Bloomberg via Getty Images
Trader Joe’s

Reader score: 87
Location: Nationwide
Year founded: 1967

This offbeat supermarket chain, which features a limited assortment of goods and specializes in store brands and unusual foods, has gained a rabid fan base. Its Hawaiian shirt-clad workers cater primarily to gourmands and high-end shoppers.

The Wegmans grocery store in Rochester, N.Y. © age fotostock/Alamy
Wegmans

Reader score: 88
Location: N.Y., N.J., Pa., Md., Mass., and Va.
Year founded: 1916

Wegmans received the highest possible ranking on perishables, service, and cleanliness, and the second-highest ranking for prices. Wegmans has been recognized not only for taking care of its customers, but also for taking care of its employees: The chain ranked fifth on Fortune’s list of the 100 Best Companies to Work For.

The 14 best supermarkets in America (Part I)

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Great grocers

The supermarket as we know it is changing. A wave of consolidations is sweeping the industry, and the largest chains are changing focus as they face increasing competition from more niche stores. Online-only competitors like Amazon (AMZN) Fresh and FreshDirect are also gaining market share.

The changes could be good news for consumers, many of whom have qualms about the current in-store shopping experience. A survey of more than 27,000 subscribers in the May issue of Consumer Reports finds that although most consumers are satisfied overall, more than half had at least one complaint about their current store. Almost a third of customers had two or more problems with their grocer.

The survey revealed that a few stores are doing a great job of satisfying their customers. The magazine graded 55 major chains based on the consumer survey and found that east-coast chain Wegmans ranked the best, with a score of 88 out of 100 possible points.

At the other end of the list, retail behemoth Wal-Mart (WMT) scored the worst, receiving a paltry 67.

Consumers are becoming far less loyal to their supermarkets and are increasingly willing to visit more than one store, picking up the basics at one supermarket, traveling to another for ethnic or gourmet foods, and filling out the rest of their needs with online shipments.

hebDBCF7274B561819EF04D19ED73DE4_h218_w423_m6_ofalse_lfalse_bwhiteH-E-B

Reader score: 81
Location: Texas, northern Mexico
Year founded: 1905

H-E-B appeals to the Texas pride of its customers, with private labels often referencing the Lone Star State and “Hill Country Fare.” The chain received above-average rankings on all categories on the survey.

harris29EC63FB614C15786FE114F849C631_h218_w423_m6_ofalse_lfalse_bwhiteHarris-Teeter

Reader score: 81
Location: N.C., S.C., Va., Ga., Tenn., Fla., Md., Del., and D.C.
Year founded: 1939

In January, supermarket giant Kroger (KR) finalized its purchase of this southeastern chain for $2.5 billion. The combined company will operate more than 2,600 stores and employ more than 368,000 workers.

DDC8A47069D1D47EF8EEBD22BA632F_h218_w423_m6_ofalse_lfalse_bwhiteHy-Vee

Reader score: 81
Location: Ill., Iowa, Mo., Kan., Neb., S.D., Minn., Wis.
Year founded: 1930

At this supermarket, customers never have to shop hungry: They can sit down to a full meal before stocking up their carts. The Midwestern chain has announced plans to remodel 75 of its stores in the next three years to feature a full-service restaurant and bar.

aldiE30B11B8DB34F259B1F3674F861AE_h218_w423_m6_ofalse_lfalse_bwhiteAldi

Reader score: 81
Location: Nationwide
Year founded: 1913

Owned by the same German company that owns Trader Joe’s, Aldi has been expanding rapidly, adding more than 80 new stores annually in recent years.  The store’s fans love the low prices so much that they’re willing to pay a quarter to use a cart in the store.

C19DD4A95BAB569DC04F8E2DE53EA_h218_w423_m6_ofalse_lfalse_bwhiteWin-Co

Reader score: 81
Location: Ariz., Calif., Idaho, Nev., Ore., Utah, Wash.
Year founded: 1967

This employee-owned chain has garnered a huge reputation within the supermarket industry for its rock-bottom prices, which often even undercut the deals offered by Wal-Mart (WMT). However, unlike Wal-Mart, which is often criticized for its treatment of employees, Win-Co is an employee-owned chain, and offers most staffers, including part-time employees, pension benefits and a health plan.

5CF7FC10ED93DB984993397D61D5E3_h218_w423_m6_ofalse_lfalse_bwhiteStater Bros.

Reader score: 83
Location: Calif.
Year founded: 1936

Stater Bros. is the largest privately owned supermarket chain in Southern California, with more than 18,000 employees and nearly $4 billion in annual revenue. The store received the highest rating in price satisfaction, and an above-average rating on service, cleanliness, and perishables.

 

Stater Bros. debuts regional exclusive.

StoreLocatorImageStater Bros. is the latest food retailer to distribute the Wholesome Goodness line which emphasizes whole grains, fiber, essential omega 3 and omega 6 fatty acids, while minimizing or eliminating sugar, sodium and fat.

“We know that our customers want to eat healthier,” said Jack Brown, chairman and CEO of Stater Bros. Markets, San Bernadino, Calif., in a statement. “That’s why we’re delighted to be the only supermarket chain in Southern California to offer Wholesome Goodness.”

Wholesome Goodness was created by retail branding firm United dsn and is available in 5,000 stores nationwide. The 50-SKU line is distributed through Walmart Canada, Rite-Aid and others on a regionally exclusive basis. Foods include Multigrain & Flax Tortilla Chips, Quick Cook Steel Cut Oats, Pineapple Salsa and Sour Lemon Raisins.

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