Supermarkets, Eager to Grow, Set Sights on Northern Virginia

Betty Kang staffs the florist kiosk at a Safeway store in Hanover that adopted a new "gourmet" format. It opened in April. Safeway is cognizant of challenges from upscale grocery chains in the Washington region. (Katherine Frey For The Washington Post)

Salisbury, N.C.-based Food Lion LLC, one of the region's fastest-growing grocery chains, plans two new stores this year, one in Dale City, the other in Woodbine, said spokesman Jeff Lowrance.

In choosing store locations, each chain uses its own formula to reach target demographics -- and wealth is usually high on the list. That helps explain why some parts of the region will, at least for now, be left out of the supermarket expansion even if they have relatively few stores, brokers said.

Harris Teeter and Wegmans in particular are chasing after high-income households, said Peter Framson, principal of Green Light Retail Real Estate Services LLC in Bethesda. "Everyone can sell Folgers coffee, but not everyone can sell some of these more exotic foods," he said.

Giant, however, said it is close to announcing a store in the District's Congress Heights neighborhood, in economically depressed Ward 8, which could open in 2006, said Barry F. Scher, a Giant vice president.

Some grocery executives and retail brokers said Giant and Safeway are vulnerable -- Giant because of its merger last year with Ahold USA Inc. firm Stop & Shop Supermarket Co., which executives acknowledged did not go smoothly, and Safeway because of a prolonged employee strike on the West Coast.

"They are taking their eye off the competition because they are focusing on internal things," Rodgers said.

Scher said Giant "will have to become much more competitive." This year, Giant plans to open four stores in the region: two in Northern Virginia and one in suburban Maryland in addition to the Columbia Heights store.

Giant plans to also remodel three stores -- a major priority for the chain, because its average store is 8.7 years old and Stop & Shop executives say they want stores remodeled about every nine years. "We want to remodel in a quicker manner than we have in recent years," Scher said.

Safeway, meanwhile, is rolling out a new, upscale store format in the region with remodeled service departments.

Inside, there is a broad lineup of gourmet food, including an olive bar and gourmet cheese section. Kiosks replace traditional service counters. And there is extensive use of mahogany and recessed lighting. The first Washington area store to use the format opened in April in Hanover.

Safeway plans to open four local stores this year, several of which are to use the new format, said company spokesman Craig Muckle.

Muckle said Safeway "is not complacent. Our goal is put stores where people want them." But with competition heating up in a region dominated for nearly seven decades by just two grocery chains, Muckle said he expects that some shoppers "will look for something new and different."