Traditional grocery stores like Food Lion, Farm Fresh and Harris Teeter are facing stiff competition in the Tidewater market, according to a new report by Food World, an industry publication.
According to the report, Food Lion holds the largest market share for groceries in the area, controlling 41 percent of the market among traditional grocery stores.
But when looking at the entire grocery retail scene, alternates, like drug stores, convenience stores and general merchandise stores like Walmart, make up 51 percent of the market. Food Lion still takes the top spot among all grocery retailers, but the chain's market share is diminished to 20 percent.
Total food sales for the area are $4.69 billion.
Food Lion's ranking is directly linked to the large number of stores it has in the region, says Jeff Metzger, publisher of Food World. His analysis of the Tidewater market is included in the report.
“Tidewater remains the only market in the Mid-Atlantic where the supermarket base business (in dollars) is shrinking compared to the growth of alternate channel merchants,” Metzger writes.
Kroger, which industry experts agree is poised to gain significant ground, plans to add three marketplace stores in the region within the next several years, adding itself to the “alternates” category, and likely increasing its reach to the local shopping public.
The study included data from Chesapeake, Gloucester, Hampton, Newport News, Isle of Wight, James City County, Norfolk, Portsmouth, Suffolk, Virginia Beach and York County.
Food Lion reported $964 million in sales in 2013, compared to $1 billion in 2012. The chain’s market share dropped from 43 percent to 41 percent from 2012 to 2013. The chain has 83 stores in the area.
Farm Fresh also decreased in sales, going from $776 million in 2012 to $757 million in 2013. In 2012, Farm Fresh controlled 33 percent of the market share in Tidewater, 32 percent in 2013. There are 40 stores.
Harris Teeter was third among traditional supermarkets, reporting $284 million in sales in 2013, an increase from $267 in 2012. Its market share increased from 11 to 12 percent. Harris Teeter added a store in 2013, bringing the number of locations to 13.
Kroger also made small increases in 2013, reporting $113 million in sales in 2013 over $110 million in 2012. Kroger, which has only one store on the Peninsula and seven stores total in the area, has a hold on almost 5 percent of the market.
Giant, Trader Joe's, Fresh Market, Camellia, Save-A-Lot and Whole Foods round out the top ten.
In Hampton and Newport News, Food Lion is at the top of the list for market share, as it is for most other Tidewater localities. In Hampton and Newport News, Food Lion is followed by military commissaries, Farm Fresh and Walmart.
In Gloucester, Walmart holds the top spot, while Farm Fresh beats other chains in James City County and Williamsburg. Walmart is listed as the top grocery retailer in York County and Suffolk.
The Top 20 grocery retailers for the region are listed in this order, from highest sales to lowest. Sales and percent changes are estimated.
Food Lion. $964 million. 4 percent decrease in sales from 2012. One store closed.
Farm Fresh. $757. 2 percent decrease. No store changes.
Walmart. $600. 9 percent increase. Two stores added.