Wegmans Ends Photo Processing; Hurdle for Others

Wegmans Food Markets' decision to shutter its 62 in-store photo departments last weekend represents the challenges food retailers face in the fast-evolving digital photo business. The growth of digital photography has meant significant changes in the business. Our digital photo business was not growing fast enough to offset the loss of traditional film sales and processing, according

ROCHESTER, N.Y. — Wegmans Food Markets' decision to shutter its 62 in-store photo departments last weekend represents the challenges food retailers face in the fast-evolving digital photo business.

“The growth of digital photography has meant significant changes in the business. Our digital photo business was not growing fast enough to offset the loss of traditional film sales and processing,” according to an announcement on Wegmans' website.

Alan Bullock, associate director, Internet imaging trends, InfoTrends, Weymouth, Mass., said that while the trends are very good for growth of digital printing at retail, the grocery channel is an exception. Grocery has been losing share of the photo processing business over a period of time, partly because the chemicals used to develop photos conflict with a food retail environment. During Wegmans' 24 years in the photo processing business, it worked well for the chain for a long time, said Bullock.

Film processing has traditionally been a traffic driver in the grocery business, but the emergence of online processing services now is driving orders. Bullock expects that by 2012 close to half of all retail photo printing will originate from outside the store through online orders.

Lower traffic levels in processing and perhaps an aging equipment base may have led to Wegmans' decision to exit the business, said Bullock. It would cost Wegmans at least $30,000 to fully equip a store with new digital printing machines, Bullock added.

He noted that digital kiosk self-service processing also presents problems in the grocery store, because consumers don't take the time to work the kiosk. “They don't have the time to spend as they would in other retail channels. They may have a half-gallon of ice cream dripping from their cart or small children anxious to get home or to the candy aisle,” Bullock said.

Some 78 part- and full-time employees were reported to be affected by the cut in photo processing. A Wegmans spokesperson told local media that employees would be offered other positions.

Wegmans' online photo business, hosted by LifePics, also was closed, as well as a central photo lab. Wegmans advised customers with remaining photo orders to pick them up at the service desk within the next 30 days. The retailer also urged customers to find a participating LifePics retailer in their area if they choose to continue with the online service, which hosts customers' digital photo albums.

Chris Newton, a spokesperson for LifePics, Boulder, Colo., said the move to digital should boost photo print orders for supermarkets. “We see digital photos enabling more photo finishers, including more grocery businesses, to accept more orders of photos online.”

This year, LifePics began hosting digital photo services at Wakefern Food's ShopRite stores and at Hy-Vee. Other grocery retailers using the company's services include Safeway, Supervalu, H.E. Butt Grocery Co., Raley's, Woodman's Market, Schnuck Markets and Brookshire Grocery Co.

Industry insiders see Wegmans' move as especially significant, because the chain shares its hometown with an icon of photography, the Eastman Kodak Co.