Albertsons Sees Slide in Seattle

IN A MARKET WHERE Supervalu has lost some of its distribution business in recent years, its Albertsons chain also seems to be losing market share. The chain's market share fell to 8.7%, compared with 9.5% a year earlier, according to the latest data from Metro Market Studies, Tucson, Ariz. Those stores had a branding problem when they were part of the original Albertsons chain, and Supervalu hasn't

IN A MARKET WHERE Supervalu has lost some of its distribution business in recent years, its Albertsons chain also seems to be losing market share.

The chain's market share fell to 8.7%, compared with 9.5% a year earlier, according to the latest data from Metro Market Studies, Tucson, Ariz.

“Those stores had a branding problem when they were part of the original Albertsons chain, and Supervalu hasn't done anything to establish a strong brand image for those stores in any fashion,” said Bert Hambleton, principal at Hambleton Resources, Issaquah, Wash.

“Before Supervalu, the stores seemed to follow a strategy du jour, and since Supervalu that still seems to be the case, with low prices emphasized one week and enhanced service the next.”

Pleasanton, Calif.-based Safeway is increasing its market share in Seattle, up slightly to 23.2%, compared with 23% a year ago.

“Seattle is still a Safeway market,” said Hambleton. “Some of the stores were in need of a facelift, and now that Safeway is almost through upgrading stores to the lifestyle format, it's getting a sales boost — though the drop in the economy has put those gains pretty much back at neutral.”

According to Art Turock, a consultant based in Kirkland, Wash., “Because of the presence of so many upscale independent players in the Seattle market, along with a handful of Whole Foods locations, consumers no longer perceive Safeway as being high-priced. In terms of pricing, Safeway is perceived as being fairly close to QFC.”

Quality Foods Centers — a division of Cincinnati-based Kroger — has seen its market share hold steady, moving to 16.5% this year compared with 16.6% last year.

Turock said QFC does a good job maintaining a low-price perception through its marketing programs, which include a variety of deals on multiple purchases (10-for-$10, four-for-$5) throughout the store.

Hambleton was more critical of QFC, noting that it has lost most of the unique aspects it had before Kroger acquired it in 1998.

Issaquah-based Costco continues to benefit from being the homegrown retailer, with attractive prices in a weak economy, increasing its share to 11.8% from 11% a year ago.

For Kroger-owned Fred Meyer, with its mix of food and general merchandise, sales picked up a notch, moving to 9.2% from 9% a year ago. (Combining QFC and Fred Meyer volume would give Kroger control of 25.7% in Seattle, slightly ahead of Safeway at No. 1.)

SEATTLE

RETAILER STORES MARKET SHARE '09 MARKET SHARE '08
Safeway 89 23.2 23.0
Quality Food Centers 65 16.5 16.6
Costco 13 11.8 11.1
Fred Meyer 33 9.2 9.0
Albertsons 40 8.7 9.5
Haggen, Top Foods 17 5.6 5.7
Wal-Mart Supercenter 6 3.3 3.1
Unified Grocers 45 3.0 3.0
WinCo 4 2.4 2.5
Trader Joe's 12 2.0 1.9
PCC Natural Markets 9 1.6 1.3
Cash & Carry 12 1.4 1.5
Whole Foods Market 4 1.4 1.5
Metropolitan Market 6 1.3 1.3
7-Eleven 152 1.3 1.3

Includes King, Pierce and Snohomish counties.

SOURCE: Metro Market Studies