NEWS

Big-box discounters are hungry for more food shoppers

Steve Adams

More than a decade after taking on supermarkets by introducing grocery sections, discounters are turning up the heat. Target Corp. is expanding grocery sections and adding fresh food and produce in many locations, including its Hanover store. Wal-Mart Stores Inc. has renovated many locations, including its Halifax store, to make room for bigger food sections, and it is pushing a new bottom-dollar private-label line.

It all adds up to more competition than ever for traditional grocers in a price-conscious environment.

Priscilla Sullivan of Cohasset buys the bulk of her groceries at Stop & Shop, but a trip to Hanover this week found her filling her shopping cart with $100 worth of groceries at Target. Sullivan was impressed with the prices of snacks, eggs and canned goods as well as the quality of the produce.

“I was over this way anyway, and I thought, ‘I’m going to pop into Target,’” Sullivan said. “If I’m down here, I’m definitely going to come down here and shop.”

The Target store in Hanover is one of 18 new Target stores that opened in the U.S. in October with expanded food sections, including 800 square feet of perishable foods.

Minneapolis-based Target has opened or renovated 100 stores nationwide with the larger food sections this year, and it has said it plans to add them to a substantial number of its stores over the next three years. The new store prototype, known internally as the “PFresh” store, contains 16 to 27 aisles of food, twice as many as a traditional Target. Two aisles are devoted to fresh produce, dairy products, bread and meat.

At the Hanover store this week, signs promoted specials such as Perdue boneless chicken breasts for $1.99 a pound and ground round for $2.69 a pound. Packages of Target’s private-label Market Pantry brand cheese hung side-by-side with Kraft and Cabot varieties, and name-brand frozen foods advertised discounts closer to discount club prices than supermarkets.

The grocery section is about half the size of the food sections in SuperTarget stores, which contain about 50 aisles of groceries.

Still, the expanded merchandise assortment allows Target to market itself as a one-stop shopping venue, said Jennifer Halterman, a senior consultant for Retail Forward, an Ohio retail consulting firm.

“It definitely raises the one-stop appeal, especially for the busy mom who is coming to Target for her needs and can stop and pick up something quick and easy as a fill-in grocery stop,” Halterman said.

Target’s model appeals primarily to people who are already shopping in the store, Halterman said. Unlike most supermarkets, it lacks ethnic food sections and a substantial prepared food-to-go assortment.

“It has the potential to steal some trips from the neighborhood supermarket, if Target can tweak it and make it more of a destination,” she said.

Wal-Mart, the world’s largest retailer, has been flexing its muscles locally as well. The Bentonville, Ark.-based company now has 6 percent of the grocery market in the nine-state Northeast region, according to a 2009 study by the Griffin Report of Food Marketing.

In 2005 Wal-Mart introduced the grocery superstore format on the South Shore when it opened a 227,000-square-foot store in Plymouth that included a 70,000-square-foot grocery section.

This spring, Wal-Mart temporarily closed its 104,000-square-foot Halifax store for a renovation project that added a full line of groceries including meat, produce and deli items.

Wal-Mart also has responded to consumers’ tighter spending habits this year. In March, it revamped its Great Value private-label brand, which promises prices up to 20 percent lower than name brands on more than 100 food categories, from ice cream to pork and beans.

Steve Adams may be reached atsadams@ledger.com.