Giant Food Inc. has increased its share of the Washington supermarket business by more than 2 percentage points in the past year, widening its lead over Safeway, says a new study of the local grocery business.
Giant's computerized checkouts now ring up one out of every three dollars spent in Washington area supermarkets, according to the study published by Food World, a regional industry publication.
Safeway is still a solid, second, with 27.8 percent of the business to Giant's 33.8 percent, the study shows. A&P ranks third, with 7.4 percent, followed by Grand Union, Memco, Magruders, Jumbo and Pantry Pride.
Not only is Giant's share of the market up two points from last year's 31.2 percent, but its lead over Safeway has widened from an estimated 4.5 points to more than 6, than annual market study declares.
Safeway executives disputed last year's Food World study which showed that for the first time Giant had established a clear lead in what had been a neck-and-neck race. Representatives of the chains could not be reached Sunday for comment on the latest study, officially being released today.
The report covers chain supermarkets in the District of Columbia; in Montgomery, Prince George's and Charles counties in Maryland; and in Arlington, Fairfax, Loudon, and Prince William counties in Virginia, plus the cities of Alexandria, Falls Church and Fairfax.
Food World President Richard Bestany said 90 percent of the chains provided sales data for the market study. Figures for the remainder were estimated on the basis of data obtained from past and present employes of the stores and from wholesale representatives who work closely with local retailers.
The study shows the 87 Giant Food stores in the region checked out $898 million worth of goods last year, compared with sales of $736 million by the 129 Safeways. Safeway's sales were up 13 percent, but Giant's jumped 18.6 percent.
Giant also ranked first in the Baltimore area, with sales of $307 million and 16 percent of the market, followed by Pantry Pride with $233 million and 12 percent, A&P with $228 million and 11.9 percent and Safeway with $126 million and 7 percent.
Giant's gains came in part because of significant improvements in the chain's operations and marketing stragy and in part because of the weakness of its competition, said Jeffrey Metzger, editor and publisher of the Columbia-based Food World.
The study showed A&P, Grand Union and Pantry Pride lost share of market during the 12 months ended April 30. In the food industry, share-of-market figures are much like television ratings, providing a quick look at how one chain is doing against another.
Once the effect of inflation was factored out, total local supermarket sales were basically flat last year, Metzger said, so the only way a chain could grow significantly was to take away somebody else's customers. "The climate and competitive nature of the grocery business in the Baltimore-Washington market have never been hotter," he added.
Adding to the heat were the openings of the area's first discount food stores, offering lower prices than conventional markets, but without their selection or services.
A&P picked the Baltimore-Washington area to start its new economy outlets called Puls stores. Known in the trade as "box stores "--because merchandise is displayed in shipping cartons -- the Plus stores were converted from unprofitable A&P units. Plus is patterned after stores of the same name in Europe run by the Tenglemann Group, the West German grocery concern that now controls the Great Atlantic and Pacific Tea Co.
The five local Plus units did $27 million worth of business last year, enough to make Plus the ninth largest chain in the area, right behind Pantry Pride. But sales of the conventional A&P's dropped by $25 million and the combined A&P and Plus market share was down slightly.
Pantry Pride's share of market fell a fraction of a point and local volume was down by $1 million, the study estimates. Pantry Pride is owned by Food Fair Inc., which is in the midst of reorganizing under federal bankruptcy laws.
Along with no-frills stores, the past year also brought no-frills food to local supermarkets, like Safeway's Scotch Buy brand and other chains' plain white cans with no brand at all.
Giant Food refused to join the generic game, publicly denouncing the plain-Jane brands as a gimmick and promoting its private label merchandise as a better value for the money.
Giant's other competitive edge apparently was its computerized checkouts. Giant executives have insisted for years that every time they put the computers in a store, business went up. So they speeded up the pace of computerization and by last summer had computerized checkouts in every store.
Now Safeway is using computer checkouts in its newest stores, like the one just opened on Wisconsin Avenue north of Georgetown, which is projected to become the highest volume supermarket in the area.
The old store on that site was the most successful Safeway in the region, doing almost $19 million of business last year, Food World estimated. Giant's highest volume unit is on Old Georgetown Pike in Bethesda, ringing up about $19.5 million a year.
The current king of the local supermarkets is the Magruder's on Alpine Road in Rockville, which Food World estimates did $21.3 million last year. Averaging $14.4 million a store -- to Giant's $10.5 million -- Magruder's has the highest sales per store in the area.
Based on sales in the first few weeks of operation, two new warehouse type stores called Basics are about to take the volume title away from the conventional supermarkets. The study ranks them first now, but the Basics stores have not yet been open a full year.
If the initial sales pace can be kept up, the Basics on St. Barnabas Road in Marlow Heights will do a staggering $41 million this year and the one in Sterling Park will top $23 million.