Giant Food Inc. has solidified its position as the area's leading food chain over the past year, taking in 45 cents of every dollar spent in local supermarkets.
The annual survey of area supermarket sales published in this month's issue of Food World, an industry trade publication, shows Giant's share of the market rose a full percentage point in the 12 months ending in March, from 44.3 percent to 45.3 percent. Two years ago, Giant's market share had dropped two full percentage points, to 42.9 percent.
The Landover grocer's closest competitors, Safeway Inc. and Shoppers Food Warehouse, saw their share of the market decline slightly, while Food Lion Inc. continued to gain customers as it inched closer and closer to the Beltway.
Safeway's share of the area market dropped to 25.4 percent from 26.4 percent. The drop may be due in part to the fact that it now operates two fewer stores. But Shoppers dropped to 12.6 percent from 12.9 percent, even after it opened a large store in College Park.
Food Lion's share of the area's $6.6 billion in supermarket sales rose more than a full percentage point, from 4.8 percent to 6 percent, making it the area's fourth-largest supermarket chain. The Salisbury, N.C.-based grocer looms as a threat to entrenched rivals and especially Shoppers Food, which also targets budget-conscious consumers.
Food Lion has emerged as the region's most aggressive player by opening 10 new stores in the Washington area in the past year.
"They are a gnat on the horizon," said Jeff Metzger, publisher of Food World and an expert on the region's supermarket scene.
Giant spokesman Barry Scher partly credited the gains in his company's ratings to the grocer's new "Fresh Ideas . . . Great Values" marketing push. "The campaign has met with considerable success," he said.
Metzger said Giant has recuperated from Shoppers Food Warehouse's aggressive expansion in the Washington area in the '80s and '90s, as well as a five-week Teamsters union strike in late 1997. The strike turned off many customers, forcing Giant to cut prices. Since then, Giant has largely remained impervious to threats to its dominant standing in the Washington area.
Giant's improvements also come during a time of great change. The company was purchased last year by Dutch grocery conglomerate Royal Ahold NV, which also owns Stop & Shop Cos. of Quincy, Mass., and Giant Food Stores Inc. of Carlisle, Pa. Ahold also plans to add Pathmark Stores Inc. of Carteret, N.J., to its portfolio.
Officials with Safeway and Shoppers Food, the area's second- and third-largest supermarket chains, respectively, said they weren't concerned with the small dips in market share.
"I'm not sure if it means anything," said John Belknap, chief financial officer of food wholesaler Richfood Holdings Inc., which owns Shoppers. "It's such a small statistical difference."
Also down in this year's supermarket ratings were Fresh Fields/Whole Foods, Magruder's, Super Fresh, Sutton Place Gourmet and Murry's. One exception was Weis Markets, which was up a fraction of a point from a 1.85 percent share of the market to 1.86 percent.
The arrival of upscale grocer Harris Teeter Inc. in Northern Virginia over the next 18 months promises to heighten the competition next year.
Analysts expect the supermarket industry to continue to consolidate, putting more pressure on independents and regional chains. In addition to Ahold's acquisition of Giant, food distributor Supervalu Inc. of Minneapolis recently announced plans to buy Richfood, including the Shoppers chain.
More for Giant
Giant Food's market share among D.C. area grocery stores increased nearly a full percentage point last year:
1999 sales, in millions
Whole Foods / Fresh Fields:
D.C. area market share
Whole Foods / Fresh Fields
Super Fresh / A&P
Sutton Place Gourmet
NOTE: For years ended March 31
SOURCE: Food World