Grocery Territories of America | Hacker News Reader

Grocery Territories of America

washingtonpost.com

32 pointssurprisetalk49 comments

My closest Albertsons and Kroger stores are across the street from each other. This merger would absolutely destroy thousands of jobs from redundant locations and remove a ton of competition.

I suspect that it's been difficult to keep so many staffed and open, especially since the pandemic.

Also, there may be a glut of grocery stores currently; I can swing a cat and hit 13 brands of assorted stores in the grocery business.

Not counting dollar stores, food banks, ethnic, convenience, hyperlocal farmer's markets, and various co-op/mobile fresh veg services and gardens.

If I think about it, it's nearly ridiculous how many different food outlets there are in that space; all need staffing and profits and customers.

Plus, in this day and age, services such as Instacart are leveling the playing field to where I can 1-click shop at as many stores as I choose. With this sort of consumer power, plus inflation and a crazy labor market, consolidation and closures are practically inevitable.

I'm not going to blame these giants for doing pragmatic things, but yeah, it's gonna hurt.

Instacart has its own set of prices for the stores it pulls from. You're not doing true competitive shopping by using them, you're subject to whatever agreement they have with those chains and possibly individual product brands.

My point with Instacart (as a primary example of vendor-neutral delivery services) is that anyone can sit at home and choose any store to shop at, regardless of cost, distance, or branding.

The consumer doesn't need to drive the streets, park in the lot, or show their face in the store, yet benefits from the enormous selection of items in every menu.

These services obscure any externalities associated with all these stores, while making discovery easier than ever -- how else would you routinely peer into a store's inventory without being there? They used to spam people with weekly ads and coupons, but that's largely obsolete at this point.

Not all shoppers are cost-sensitive enough to switch stores, but Instacart enables picking and choosing. Conversely, it expands every store's reach, and enables brand loyalty as well--even if I move further away from my favorite store, or the nearest one closes, Instacart may still enable access to it.

Kroger and Albertsons are selling off 579 stores, according to the article, in an effort to get this merger approved. Have you checked whether either of these locations are on the list of stores being sold? Several Safeway, owned by Albertsons, locations are being sold in my area.

Years ago we had five Kroger stores. One in each neighborhood.

Kroger systematically closed them one by one. Offered employees transfers to other stores.

As the last hurrah, they built a new Kroger, towards the "nice" side of town. It was larger than any of the other stores, but since the other five were closed, everyone has to go to the one store. It's a huge mess, it's packed, they are understaffed, things are always out of stock...

We also had A&P and a couple smaller regional chain stores but they are all gone now.

Little niche grocery markets aside, it's frustrating that whole areas of commerce are no longer viable for ma and pa.

I read The Great A&P and the Struggle for Small Business in America which lays out how big players came to dominate this industry (in fact my great grandfather owned one of these neighborhood grocery stores that A&P apparently put out of business).

Speaking of ma & pa, I remember when ma & pa could buy a color Xerox machines, rent a small retail space and they were suddenly in the copy business.

Or when ma & pa could rent a small retail space, buy a bunch of VHS tapes, and were in the video rental business.

Looks like restaurants and nail salons are most of what has been left for us.

It looks like Wegmans, my favorite grocery store, isn't included in their data at all?

I searched for at least 2 counties I know have one and it wasn't included in their results.

That seems like a pretty big over sight given their presence in 9 states and almost 200 locations.

They did have the Pittsburgh based Giant Eagle but lacked many of the smaller chains in the area like Sparkle Markets: https://www.sparklemarkets.com/

Very cool project though. Wonder if there's any chance they'll open source their data.

Wegmans is the best. They do show it in their home - Rochester, NY area.

Livingston County, NY, just south of Rochester, reported “too little data”, so perhaps their metrics are misreported in general for Wegmans to have shown up in their analysis.

Wegmans is probably too regional for the point they are trying to make. We used to be the Hudson news of central Pennsylvania and it was exciting watching Wegmans move into our region. They were as great partner.

The exclusion of it seems to undermine their point?

They use a questionable method they use for their "Top Five Grocers by U.S. market share." which seems to be using fiscal year end sales for Walmart even though they sell more than food but only counting Whole Foods revenue for Amazon even though it obviously sells food through its main website.

If you correct for very obvious problems with the data source in their marketshare picture like limiting Walmart/Sam's Club to food sales and including Amazon's online food sales Walmart has about 18% of the market in the US and Amazon has about 11%.

It's weird that they use store count sourced through OpenStreetMap most of the article than in the graphic just kind of switch to a totally different source based on revenue?

But using that questionable method Wegman's would be the 13th largest chain right behind Trader Joe's which they do list and well above many of the chains in their dataset.

I have to imagine it's not an intentional exclusion just poor data collection?

Also why is Giant Eagle colored the same color as Ahold Delhaize on the map?

> The exclusion of it seems to undermine their point?

I’m shocked, shocked, that a newspaper would exclude information that would undermine the editorial point it was making!

This is sort of what I was thinking. I remember when Ahold bought out that family. That left Weis Markets as our last family owned regional chain.

> Also why is Giant Eagle colored the same color as Ahold Delhaize on the map?

I had thought it was because Ahold Delhaize owned Giant, and they do. However, it turns out Giant Eagle is an entirely separate company, which makes the color pick even more confusing to me.

I see what you are saying. The article has and agenda and they are using it. Traders Joe’s is also nationwide but lacks the density in most areas.

I thinks Wegman’s focused on the Interstate 81 corridor for expansion.

Similar to Meijer in Michigan/Ohio/Indiana

Meijer is less common than Walmart in most areas it operates, and much of rural northern Michigan doesn't rate a superstore (vs the smaller grocery stores that SpartanNash operates).

They got the addresses from OpenStreetMap, so the data is party open already.

They didn't necessarily omit those chains either, their criteria was "most common owner by area", and depending on how you decide the minimum size for an area, they could just naturally fall out.

I'm not talking about the map but the search by county feature on the page which shows many stores with significantly lower marketshare than Wegmans by any metric you want to use.

https://web.archive.org/web/20240928091654/https://www.washi...

I've noticed that this stretches farther than America.

For example big name retailers in the Caribbean like Massy seem to be mostly or partially owned by Save-a-lot .. but I haven't had the time to investigate this yet.

I've been curious as to why there aren't any "virtual" grocery stores. With so many people willing to pay for grocery delivery and meal delivery, why not cut out the middleman? It feels like there may be many opportunities to optimize away costs and compete with brick-and-mortar grocery stores.

Not only that,but with a proper virtual grocery store, inventory should be much easier to keep up with. I would even expect things like live video stream of the items and being able to pick specific items (useful for perishables like fruits and such).

Good idea for a YC startup? :D

It definitely exists, but I only know of sayweee. Which specializes in asian groceries.

There have been any number of attempts of this over several several decades. I remember being an early customer of some of the first of these virtual grocery store efforts back in the late 90's. All of the pure play efforts either failed or looked more like virtual convenience/liquor stores than grocery... a small number of consumables with longish shelf-lives and booze on demand.

While many of the positives you mention are true, I think it gets more difficult once you get into the logistics around storing and especially moving smaller lots of products, many of which aren't shelf-stable or require special handling such as refrigeration. These things limit the delivery areas and order volumes per vehicle that can reasonably be served by any one warehouse or vehicle which pushes up the costs of executing those deliveries. In a traditional bricks-and-mortar grocery, those transport & logistics costs still exist, but are born directly by the customer who can skip things like refrigeration during transport since they are only servicing themselves... and often don't think of those costs when considering the price of groceries since the purchase of things like gas for the car aren't directly related to the grocery purchase.

I think all of this is why many grocery chains deliver out of traditional stores or offer pickup or why things like Instacart and the currier-like services have been more successful.

To your point about perishables, services like hellofresh are doing just fine shipping perishables in a sealed cardboard box with an "icepack" (not really ice). With that in mind, I don't understand why the logistics Amazon has achieved with their warehouses and delivery drivers couldn't work for grocery. Unlike hellofresh, if they can re-fit their vans, they can do better and cheaper with less spoiled food. Amazon's idea of a grocery store where you don't have to check out (they use cameras+ML) was a good start but imagine if customers could use the same system to pick items in their warehouse instead, and amazon workers and/or machines select and pack them in a cooled box and deliver it same day just like they do with packages.

Existing grocery chains don't want to undercut their brick and mortar business, so they keep trying to make delivery a side hustle. The taxi and restaurant industry did the same thing and failed.

Americans are complaining a lot about groceries and grocery chains price gouging. And you also have the environmental benefits as well as societal benefits such as elimination of food deserts.

We have one here in Prague , Czechia which absolutely crushes the brick and mortar shops. I'm always shocked by how shitty grocery delivery is in the us. There's got to be some factor that makes it impractical. Maybe the distances involved? Admittedly the entire Prague Metro Area is like 25km in diameter, and very dense compared to pretty much any area in the us.

The competition for that is grocery stores that deliver, where there isn't really an extra middle man to cut out (and where they already have an extensive logistics operation, likely with multiple locations).

InstaCart and the like are selling extreme convenience, not groceries.

what you're saying is similar to the taxi industry pre-uber, they had similar attempts but they could never do anything to undercut their main existing business. The service experience with grocery stores that delivery (similar to taxis) is poor and the cost is higher. I'm thinking a pure virtual play can at least compete with brick-and-mortar.

Cost, and being able to browse visually and pick specific items are the two main obstacles, which today's tech can solve, albeit with a high startup cost.

In central Florida, Kroger is virtual.

Food streaming? You might be onto something.

Maybe we can make it more energy inefficient though and deliver the groceries by drone.

Good idea -- DoorDash has you covered!

They've got a variety of offerings such as "The Essential" and "DashMart", stores they own where Dashers can pick up food and other products.

Arguably, these services are all going to converge on virtuality soon, because it matters not to the consumer whether these places have storefronts, open to the public, or even a brand, so the "ghost kitchen" model here is inevitable.

Even chains which still implement in-house picking and delivery (Safeway, Kroger and others) will find it efficient to run locations totally closed to public traffic, no checkers or baggers or huge parking lots or deli tables necessary.

Webvan circa 1996: https://en.wikipedia.org/wiki/Webvan

HEB is a great experience in my area. Kroger is awful by comparison. It's kind of wild watching people pull into their parking lot when HEB is literally right across the same street.

I also have the option of driving to Whole Foods another 5 minutes away, but I don't see the point because HEB is so close to the quality I am seeking most of the time. It's also open at 6am every day so I can get in and out instantly.

There’s an HEB and a Kroger within 1 minute from each other where I live. On the day before thanksgiving, people will be parking in grass medians to go to HEB, and the Kroger lot will be mostly empty; people seem to avoid it here.

I often joke that the only thing keeping me from fleeing Texas is HEB.

Can you tell me more about what you enjoy about HEB so I can look out for these things when I visit next? My last visit was too short.

I'm down in the Austin area from time to time.

No wonder prices are spiraling out of control when market influence is so concentrated in a handful of companies.

Yet retail grocery businesses have low single digit profit margins. Why would a seller resign itself to earning meager profit margins if it had pricing power (I assume that is what you mean by “market influence”)?

https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr...

https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m...

https://www.macrotrends.net/stocks/charts/COST/costco/profit...

https://www.macrotrends.net/stocks/charts/ACI/albertsons/pro...

https://www.aholddelhaize.com/en/investors/quarterly-results...

The answer is that retail grocery business is highly competitive, and that price increases at retail grocery is because their costs are increasing (food vendors, labor, land, etc).

I think the question you ask has it backwards. Why should society allow a critical industry to become so concentrated that it has enough pricing power to cause harm?

It shouldn’t. But the post I responded to claims that the industry already has pricing power, and already is using it to cause harm, contrary to the data.

I see. Thanks for the clarification. If enough large companies are able to merge then we will end up in a situation where regionally there is too little competition. This is what has happened with producers of food products. A few companies control too high a percentage of the products. I think this naturally leads to cartel pricing.

American ISPs are also universally terrible and also make no money. They engage in tons of anticompetitive practices and leech state money for no results. What if you can’t measure competitiveness by a single number?

Because the assumption is that the people leading/owning these businesses want to earn more money, so if people had the power to earn more money, they would.

Also, ISPs earn profit margins that are multiples more than grocery retail businesses:

https://www.macrotrends.net/stocks/charts/CHTR/charter-commu...

https://www.macrotrends.net/stocks/charts/CMCSA/comcast/prof...

https://www.macrotrends.net/stocks/charts/T/at-t/profit-marg...

https://www.macrotrends.net/stocks/charts/VZ/verizon/profit-...

https://www.macrotrends.net/stocks/charts/TMUS/t-mobile-us/p...

ATT and Lumen have terrible management wasting money on bad investments, so their profit margins are variable and not so hot. But competent businesses like Verizon/Comcast/Charter can easily milk their wired customers who only have 1 option for ISP.

If you're going to compare ISPs and grocery stores, you might want to include turnover in your model.

(the person who invests in groceries, and turns over their inventory 15 times per year, faces a very different business from the person who invests in speculative software, and sees a handful of exits per career; the person running an ISP is likely somewhere in between those extremes)

It is fairly obvious that a business does not need to show a profit for its upmost management or owners to get/remain filthy rich through it.

There are many mom and pop grocery stores. Their prices are higher because of two things, they try to carry local produce and they don’t have the advantage of scale.

As noted elsewhere, the grocery business is one of very low margins. These aren’t the people the admin thinks is gouging people. They are not causing inflation. The monetary policy, price of money and the price of energy are driving inflation.

Not everywhere. All the grocery stores near me are either Albertsons/Kroger owned, or from smaller chains (Fresh Market, Trader Joe's). And Whole Foods, but that's Amazon now.

Trader Joe's is part of Aldi Nord.

I guess the operations are kind of freestanding.

Isn't there a balance?

If there were tons of mom-and-pops, prices would be even higher due to lack of scale economics. There are a ton of mom-and-pops where I live and they are extremely pricey -- I never shop at them.

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