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Grocery Territories of America
- ocdtrekkie 2y agoMy closest Albertsons and Kroger stores are across the street from each other. This merger would absolutely destroy thousands of jobs from redundant locations and remove a ton of competition.
- AStonesThrow 2y agoI suspect that it's been difficult to keep so many staffed and open, especially since the pandemic. Also, there may be a glut of grocery stores currently; I can swing a cat and hit 13 brands of assorted stores in the grocery business. Not counting dollar stores, food banks, ethnic, convenience, hyperlocal farmer's markets, and various co-op/mobile fresh veg services and gardens. If I think about it, it's nearly ridiculous how many different food outlets there are in that space; all need staffing and profits and customers. Plus, in this day and age, services such as Instacart are leveling the playing field to where I can 1-click shop at as many stores as I choose. With this sort of consumer power, plus inflation and a crazy labor market, consolidation and closures are practically inevitable. I'm not going to blame these giants for doing pragmatic things, but yeah, it's gonna hurt.
- Mountain_Skies 2y agoInstacart has its own set of prices for the stores it pulls from. You're not doing true competitive shopping by using them, you're subject to whatever agreement they have with those chains and possibly individual product brands.
- AStonesThrow 2y agoMy point with Instacart (as a primary example of vendor-neutral delivery services) is that anyone can sit at home and choose any store to shop at, regardless of cost, distance, or branding. The consumer doesn't need to drive the streets, park in the lot, or show their face in the store, yet benefits from the enormous selection of items in every menu. These services obscure any externalities associated with all these stores, while making discovery easier than ever -- how else would you routinely peer into a store's inventory without being there? They used to spam people with weekly ads and coupons, but that's largely obsolete at this point. Not all shoppers are cost-sensitive enough to switch stores, but Instacart enables picking and choosing. Conversely, it expands every store's reach, and enables brand loyalty as well--even if I move further away from my favorite store, or the nearest one closes, Instacart may still enable access to it.
- tssva 2y agoKroger and Albertsons are selling off 579 stores, according to the article, in an effort to get this merger approved. Have you checked whether either of these locations are on the list of stores being sold? Several Safeway, owned by Albertsons, locations are being sold in my area.
- bluedino 2y agoYears ago we had five Kroger stores. One in each neighborhood. Kroger systematically closed them one by one. Offered employees transfers to other stores. As the last hurrah, they built a new Kroger, towards the "nice" side of town. It was larger than any of the other stores, but since the other five were closed, everyone has to go to the one store. It's a huge mess, it's packed, they are understaffed, things are always out of stock... We also had A&P and a couple smaller regional chain stores but they are all gone now.
- locallost 2y agoNo wonder prices are spiraling out of control when market influence is so concentrated in a handful of companies.
- lotsofpulp 2y agoYet retail grocery businesses have low single digit profit margins. Why would a seller resign itself to earning meager profit margins if it had pricing power (I assume that is what you mean by “market influence”)? https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr... https://www.macrotrends.net/stocks/charts/KR/kroger/profit-margins https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m... https://www.macrotrends.net/stocks/charts/COST/costco/profit-margins https://www.macrotrends.net/stocks/charts/COST/costco/profit... https://www.macrotrends.net/stocks/charts/ACI/albertsons/profit-margins https://www.macrotrends.net/stocks/charts/ACI/albertsons/pro... https://www.aholddelhaize.com/en/investors/quarterly-results/q2-2024/#investors-content https://www.aholddelhaize.com/en/investors/quarterly-results... The answer is that retail grocery business is highly competitive, and that price increases at retail grocery is because their costs are increasing (food vendors, labor, land, etc).
- skhunted 2y agoI think the question you ask has it backwards. Why should society allow a critical industry to become so concentrated that it has enough pricing power to cause harm?
- lotsofpulp 2y agoIt shouldn’t. But the post I responded to claims that the industry already has pricing power, and already is using it to cause harm, contrary to the data.
- skhunted 2y agoI see. Thanks for the clarification. If enough large companies are able to merge then we will end up in a situation where regionally there is too little competition. This is what has happened with producers of food products. A few companies control too high a percentage of the products. I think this naturally leads to cartel pricing.
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- zxcvbnm69 2y ago[dead]
- dotps1 2y agohttps://web.archive.org/web/20240928091654/https://www.washingtonpost.com/business/interactive/2024/grocery-store-owners-map-kroger-albertsons-merger/ https://web.archive.org/web/20240928091654/https://www.washi...
- dotps1 2y agoI've noticed that this stretches farther than America. For example big name retailers in the Caribbean like Massy seem to be mostly or partially owned by Save-a-lot .. but I haven't had the time to investigate this yet.
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- CSMastermind 2y agoIt looks like Wegmans, my favorite grocery store, isn't included in their data at all? I searched for at least 2 counties I know have one and it wasn't included in their results. That seems like a pretty big over sight given their presence in 9 states and almost 200 locations. They did have the Pittsburgh based Giant Eagle but lacked many of the smaller chains in the area like Sparkle Markets: https://www.sparklemarkets.com/ https://www.sparklemarkets.com/ Very cool project though. Wonder if there's any chance they'll open source their data.
- lilbobbytables 2y agoWegmans is the best. They do show it in their home - Rochester, NY area.
- williamcotton 2y agoLivingston County, NY, just south of Rochester, reported “too little data”, so perhaps their metrics are misreported in general for Wegmans to have shown up in their analysis.
- detourdog 2y agoWegmans is probably too regional for the point they are trying to make. We used to be the Hudson news of central Pennsylvania and it was exciting watching Wegmans move into our region. They were as great partner.
- CSMastermind 2y agoThe exclusion of it seems to undermine their point? They use a questionable method they use for their "Top Five Grocers by U.S. market share." which seems to be using fiscal year end sales for Walmart even though they sell more than food but only counting Whole Foods revenue for Amazon even though it obviously sells food through its main website. If you correct for very obvious problems with the data source in their marketshare picture like limiting Walmart/Sam's Club to food sales and including Amazon's online food sales Walmart has about 18% of the market in the US and Amazon has about 11%. It's weird that they use store count sourced through OpenStreetMap most of the article than in the graphic just kind of switch to a totally different source based on revenue? But using that questionable method Wegman's would be the 13th largest chain right behind Trader Joe's which they do list and well above many of the chains in their dataset. I have to imagine it's not an intentional exclusion just poor data collection? Also why is Giant Eagle colored the same color as Ahold Delhaize on the map?
- bob1029 2y agoHEB is a great experience in my area. Kroger is awful by comparison. It's kind of wild watching people pull into their parking lot when HEB is literally right across the same street. I also have the option of driving to Whole Foods another 5 minutes away, but I don't see the point because HEB is so close to the quality I am seeking most of the time. It's also open at 6am every day so I can get in and out instantly.
- chomp 2y agoThere’s an HEB and a Kroger within 1 minute from each other where I live. On the day before thanksgiving, people will be parking in grass medians to go to HEB, and the Kroger lot will be mostly empty; people seem to avoid it here. I often joke that the only thing keeping me from fleeing Texas is HEB.
- wenc 2y agoCan you tell me more about what you enjoy about HEB so I can look out for these things when I visit next? My last visit was too short. I'm down in the Austin area from time to time.
- notepad0x90 2y agoI've been curious as to why there aren't any "virtual" grocery stores. With so many people willing to pay for grocery delivery and meal delivery, why not cut out the middleman? It feels like there may be many opportunities to optimize away costs and compete with brick-and-mortar grocery stores. Not only that,but with a proper virtual grocery store, inventory should be much easier to keep up with. I would even expect things like live video stream of the items and being able to pick specific items (useful for perishables like fruits and such). Good idea for a YC startup? :D
- epoxia 2y agoIt definitely exists, but I only know of sayweee. Which specializes in asian groceries.
- sbuttgereit 2y agoThere have been any number of attempts of this over several several decades. I remember being an early customer of some of the first of these virtual grocery store efforts back in the late 90's. All of the pure play efforts either failed or looked more like virtual convenience/liquor stores than grocery... a small number of consumables with longish shelf-lives and booze on demand. While many of the positives you mention are true, I think it gets more difficult once you get into the logistics around storing and especially moving smaller lots of products, many of which aren't shelf-stable or require special handling such as refrigeration. These things limit the delivery areas and order volumes per vehicle that can reasonably be served by any one warehouse or vehicle which pushes up the costs of executing those deliveries. In a traditional bricks-and-mortar grocery, those transport & logistics costs still exist, but are born directly by the customer who can skip things like refrigeration during transport since they are only servicing themselves... and often don't think of those costs when considering the price of groceries since the purchase of things like gas for the car aren't directly related to the grocery purchase. I think all of this is why many grocery chains deliver out of traditional stores or offer pickup or why things like Instacart and the currier-like services have been more successful.
- notepad0x90 2y ago
- JKCalhoun 2y agoLittle niche grocery markets aside, it's frustrating that whole areas of commerce are no longer viable for ma and pa. I read The Great A&P and the Struggle for Small Business in America which lays out how big players came to dominate this industry (in fact my great grandfather owned one of these neighborhood grocery stores that A&P apparently put out of business). Speaking of ma & pa, I remember when ma & pa could buy a color Xerox machines, rent a small retail space and they were suddenly in the copy business. Or when ma & pa could rent a small retail space, buy a bunch of VHS tapes, and were in the video rental business. Looks like restaurants and nail salons are most of what has been left for us.