Between Wegmans and Kroger, Publix heads
into an all-out grocery war in Virginia
Jul 15, 2016, 2:43pm EDT Updated Jul 15,
2016, 3:34pm EDT
Ashley Gurbal
KritzerSenior ReporterTampa Bay Business Journal
Publix Super Markets Inc.'s expansion in
Virginia brings it into one of its most cutthroat markets yet.
The Lakeland grocer this week confirmed plans to buy 10
Martin's Food Markets Stores in the greater Richmond area, pending approval of
a merger between Martin's parent company and Delhaize Group.
The interior of a Wegmans Food Markets store. Publix will face
off against Wegmans for… more
"Those are well-located stores that had performed
well," said David Crawford, assistant vice president of
retail services with CBRE Group Inc. in Richmond. "That’s
definitely going to get them a foothold in the market."
Even with those prime sites, the Richmond market will be a challenge. Wegmans Food Markets, based in upstate New
York, opened a store there in May; another Wegmans location will open in
August.
Publix has never before gone head-to-head with Wegmans, known
for its massive stores with a large prepared food selection and in-store cafes
and restaurants. Wegmans is in the planning stages of
a store in Cary, North Carolina — where Publix is also expanding — but the
Virginia stores are already open or close to opening.
But it isn't just Wegmans that Publix will face in Richmond:
Aldi, Trader Joe'sand Kroger all have a presence in the
market. Lidl, a new-to-the-U.S. German discount grocer, has confirmed a
location in Richmond, too.
In North Carolina — where Publix is aggressively expanding and
Wegmans has planned its first location — Publix has built some upscale stores that
carry some of the same features as Wegmans, like the prepared foods section and
in-store cafes.
"We will provide a clean store environment that presents a
pleasant shopping experience for our customers," a Publix spokesman wrote
in an email Friday. "The same experience our customers in other states
have come to know us for. The Virginia market is very competitive, but we
welcome competition because the customer always wins."
Richmond, known for its up-and-coming foodie scene, has a
white-collar employment base that includes Capital One's headquarters, Virginia
Commonwealth University and the VCU health system.
"It's an enticing market," said Connie Jordan Nielsen, a senior vice president
with Cushman & Wakefield | Thalhimer. "Richmond is highly educated,
with great income levels and a reasonable cost of living."
Because of that dynamic, both Publix and Wegmans likely see a
void of upscale, service-oriented grocery stores in the area, Crawford said.
"They’re probably recognizing the customer service segment
of the food market is underserved," he said. "Historically our market
leaders have been Food Lion, Martin’s, and Walmart Neighborhood Market's made a
pretty big push, too."
Nielsen, who has represented the landlords in deals with both
Wegmans and Publix, said Kroger will be a big competitor with both
newcomers.
Publix competes directly with Kroger in the metro Atlanta area
and with its Harris Teeter banner in the Carolinas.
"Kroger in this market has done a fantastic job,"
Nielsen said. "They are very well thought of in the Richmond market."
But Crawford said he's seen a ton of buzz around Publix's plans
for the 10 Martin's stores.
"The market’s pretty excited to have them coming in,"
Crawford said, "everything from their sandwiches to customer service to
store layouts."
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