LONG ANCHORED squarely in one of the weakest economic regions of the country, the Buffalo, N.Y., market actually fared better than many areas of the country economically during the recent recession.
With the strength of its university and medical industry holding steady, and the relatively affordable housing market thanks to an exodus of steel-mill and manufacturing jobs in the last decade, the economic chill in Buffalo has begun to thaw.
The market of about 1.13 million people is a relatively strong one for retail food sales, according to Tucson, Ariz.-based Metro Market Studies, which ranks Rochester, N.Y.-based Wegmans Food Markets  as the No. 1 food retailer in the market, with 10 stores and 32.6% market share, followed closely by No. 2 Tops Markets , based in nearby Williamsville, N.Y., with 37 stores and a 31% share as of the end of 2009.
Tops' share is on the rise, however, with the addition of two stores in the market formerly operated by Penn Traffic. Those two location accounted for about 1.2% of the food-retail market share, Metro Market Studies reported.
“It's a high-supermarket share market, but at the same time over the last 15 years it has had a high number of supermarket bankruptcies,” noted Burt P. Flickinger III, managing director of Strategic Resource Group, New York, which recently conducted its own market-share studies of 40 of the largest 50 markets across the U.S.
Six of the top 10 supermarket operators have filed bankruptcy in that time frame, he noted.
The most recent was Syracuse, N.Y.-based Penn Traffic, which filed Chapter 11 for the third time in 10 years in 2009 and was finally acquired by Tops.
Although conventional retailers like Wegmans and Tops have enjoyed the top positions in Buffalo's food-retailing hierarchy, they can expect to see their market share increasingly eaten away by the aggressive expansion plans of discounters, especially Bentonville, Ark.-based Wal-Mart Stores .
Wal-Mart currently captures about 7.8% of the market with four supercenters — nearly double the volume of a year ago from two new supercenters, according to Metro Market Studies.
That volume is expected to continue to expand, Flickinger said, as the company seeks to leverage volume from three new distribution centers in the region.
“What had been a market for Wegmans and Tops has become under supercenter siege,” he said.
Wal-Mart had been temporarily slowed in its growth in the region by aggressive resistance from United Food and Commercial Workers Local 1, which represents employees of Tops and others in the area, Flickinger explained.
In addition, the market is also seeing aggressive growth from limited-assortment specialists Aldi , based in Batavia, Ill., and Save-A-Lot, a division of Minneapolis-based Supervalu . Both grew their share in 2009. Aldi added two stores and boosted its market share to 4%, from 3.6%, while Save-A-Lot expanded its market share to 4.1%, including store operated both by Supervalu and by licensee Houchens Industries , based in Bowling Green Ky.
Club-store operators BJ's Wholesale , with three stores and 4.7% market share, and Sam's Club, with 2 stores and 3% share, also do well in the region.
PriceRite, the ShopRite -owned discount banner, now has two stores in the market and a 0.8% share, according to Metro Market Studies.