A spate of expansion announcements from some regional supermarket operators reflects fresh opportunities for growth among some of the nation’s strongest traditional chains — and promises to shake up some markets for years to come.
So far in 2014 at least two significant announcements of expansion into new markets have been made, including the planned entry by Giant Eagle into Indianapolis and, more recently, Hy-Vee’s planned foray into the Minneapolis market.
“Hy-Vee has been successful as it’s moved out of Iowa into Kansas City and parts of Illinois, and there’s no reason to doubt it will do well in Minneapolis,” Neil Stern, senior partner at McMillanDoolittle, Chicago, told SN.
The West Des Moines, Iowa-based chain said it has plans to open “several” stores during the coming years in the Twin Cities area, including one location that is under contract and several more “in various stages of research and development.”
Pittsburgh-based Giant Eagle, meanwhile, recently confirmed plans to enter Indianapolis in 2015 with one of its upscale Giant Eagle Marketplace stores and a GetGo convenience store.
Read more: Giant Eagle confirmed Indianapolis plans
The expansion plans of Hy-Vee and Giant Eagle follow the recent entry by Publix Super Markets into the Charlotte, N.C., area, where the Lakeland, Fla.-based company made in North Carolina debut in February.
The expansion plans outlined by these retailers — three of the most highly respected regional operators in the country — marks a resurgence in the strength and confidence of the industry following the recession, some observers said.
In Charlotte, Publix will be battling head-to-head against Harris Teeter, which has the No. 1 market share and is now backed by parent Kroger Co.
“At the end of the day, the Publix and Kroger consumer are not that much different,” noted Stern. “While Harris Teeter goes after a slightly higher income demographic, in a market like Charlotte, where they have [such strong] market share, they are reaching a pretty broad swath of the population as well.
“I expect that ultimately both chains will end up prospering in the market,” he said.
In Indianapolis, Giant Eagle will also find itself battling Kroger for market share. Kroger is the No. 1 food retailer in that market as well, with 45 stores and 26.1% of the grocery sales, according to Tucson, Ariz.-based Metro Market Studies. Walmart is right behind at 22.1%, followed by Marsh Supermarkets at 13.1% and Meijer Inc. at 10%.
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