When Kroger decided to exit the Triangle last year, citing too much competition in the grocery market here, many residents in the Triangle had to change shopping habits they’d held for years.
But where have those loyal Kroger shoppers migrated since the last store closed in August?
And how are others faring in the Triangle’s quickly-evolving grocery market, as popular chains, such as New York-based Wegmans, prepare to enter the market for the first time?
New research from Chain Store Guide, a sales-tracking firm that works directly with grocery stores to get its data, offers some clues.
The biggest winner, so far, after Kroger’s exodus appears to be national big-box retailer Target.
Target posted the largest gains in market share last year, across both Raleigh and Durham-Chapel Hill, according to Chain Store Guide. The company’s market share grew to 6.5% from 3.6% in Raleigh and to 9.2% from 3.1% in Durham.
It wasn’t just the Triangle where Target saw improvement. In Charlotte, the retailer also gained the most market share of any grocer, The Charlotte Observer reported.
The improvement for Target coincides with the company’s re-focused efforts on grocery, said Roger Beahm, executive director for the Center for Retail Innovation at Wake Forest University in Winston-Salem.
“Target over the last year has made some major strategic moves to improve its overall position in the retail sector,” Beahm said in a phone interview. “It is not just in the grocery side of the business that you are seeing that progress.”
Beahm said that can be seen in the development of Target’s private-label brands, like the Archer Farms food brand, to bring prices down and in a re-tooling of how its grocery section is displayed in the store. Target has remodeled many of its stores in the area in the past year and it has also opened up small-format stores near UNC-Chapel Hill and N.C. State University.
Howard Craft, a southern Durham resident who was fiercely loyal to Kroger, said it didn’t shock him to see Target gaining customers.
“That doesn’t surprise me,” Howard, 48, said in a phone interview, “because Target has (decent) prices, and they have a decent selection of stuff.”
It’s also got the added benefit that many people already travel to Target to buy other things, Craft noted. “I’ll grab one or two things if I am in there,” he said.
Looking for the best price
Kroger was a much more dominant player in the Durham-Chapel Hill market than in the Raleigh market before it left. (Chain Store Guide’s analysis splits the Triangle market into two.)
In 2017, Kroger controlled 17.2% of the market in Durham-Chapel Hill and 8.2% of the market in Raleigh.
But despite that hold on the market, Kroger, the nation’s largest supermarket chain by stores, decided to leave in the face of more pressure in the Triangle. The company as a whole has seen its profits squeezed by an inability to raise prices and by large investments meant to boost online sales.
In a competitive market, it’s harder for grocers to raise prices on the goods they sell, which is good for customers but bad for many of the stores themselves.
“If the growth in market share is mainly due to lower prices … it may still lead to lower profits,” Katrijn Gielens, an associate professor of marketing at UNC’s Kenan-Flagler Business School, told The News & Observer last year.
On its way out, Kroger decided to sell more than half of its 14 stores in the Triangle to Harris Teeter, the North Carolina-based store that it owned. The move, analysts said, was in part to drive consumers to a higher price point.
In Kroger’s absence, Harris Teeter has remained the third-most-popular grocery store in Raleigh (where it has 16.7% of the market) and climbed to third in Durham (15.3%). But its gains still trailed the growth that many of its peers saw.
Sarah Ho is originally from Ohio, so it was natural for her to shop at Cincinnati-based Kroger. And since Kroger left, she has indeed moved some of her shopping to Harris Teeter, but she also does a lot less one-stop shopping. Ho, 32, has lived in Raleigh for six years and often never felt the need to go shopping anywhere but the former Kroger on Six Forks Road near her house in the Brentwood area.
“I don’t pay more in groceries” than I used to, she said. “But that’s because I am able to drive multiple places to get all that I need at the best price.”
Ho said she’ll often start out at the North Hills Harris Teeter and then buy whatever items weren’t on sale — mushrooms, for example — at discount grocers Aldi or Food Lion.
Ho added that she is disappointed that not many grocers have invested in the eastern side of Raleigh after Kroger left.
For Craft, the Durham resident, the transition from Kroger to Harris Teeter didn’t sit well.
“For me, Harris Teeter, it sometimes feels like the same products that Kroger was selling but at a significantly higher price,” he said, adding that he also finds the layout of Harris Teeters “very congested.”
Like Ho, Craft no longer one-stop shops. Rather, he skips around southern Durham for items. He gets his produce from Sprouts Farmers Market — a new chain to the area that grew its market share in Durham to 1.2% — other products from Food Lion or Target and will occasionally make a trip to Whole Foods.
He says he now spends more money than he used to on groceries but notes that’s his choice. “I could do more shopping at Food Lion,” he said.
Because Kroger had such a large share of the market, many grocers saw their slice of the market increase last year.
In Raleigh, Publix opened two more stores in Wake County last year and saw its market share increase to 3.7% from 2.2%, the second-largest jump for any grocer. Publix seems poised to continue eating into its competitor’s market share, as it still has eyes on new stores across the Triangle.
In Durham, Walmart and Food Lion — the two largest grocers by market share across the Triangle —each grew by 2%. They control 20.7% and 20.5% of that market respectively, a sign that price is still a big influence on shoppers.
Whole Foods, which has slashed prices since it was taken over by Amazon, also gained ground in the Triangle last year. The organic food store — which earned the nickname “Whole Paycheck” many years ago — grew its market share in Durham-Chapel Hill to 5.1% from 4.7% and in Raleigh to 3.3% from 2.5%.
“If you lower your prices you are going to increase demand, so that’s not surprising,” Beahm said of Whole Foods. But they have also taken advantage of Amazon’s online delivery technology and the discounts that come through Amazon Prime memberships, he added.
But all of the shuffling in a post-Kroger world could all be about to change again, with the arrival of Wegmans. The chain is in the process of building six stores across the Triangle, from Wake Forest to Chapel Hill.
“Their reputation precedes them,” Beahm said of Wegmans.
Indeed, the company has developed a loyal following in the northeast and there are many transplants to North Carolina that have fond memories of the company.
“When I go visit family and friends up north, we have to do the Wegmans run, we have to visit a store,” Kellie Ford, a Raleigh resident and native of upstate New York, told The N&O earlier this year. “In the 15 or 20 years I’ve been here, Wegmans is kind of the one thing I’ve missed. I’m very glad I’m going to get that now. I’ve been waiting a long time.”
Wegmans first Raleigh store is expected to open in September.