Posted on 01/16/2017 5:17:34 AM PST by Iron Munro
Betty Duffey has a half-dozen several grocery stores vying for her business near her neighborhood in southern Pinellas County.
Publix Supermarkets is 2.5 miles down the road and she'll pass by a Winn-Dixie and a Walmart Neighborhood Market on the way there. Two miles in the other direction is an Aldi and a Walmart Supercenter. But Duffey, 63, does most of her grocery shopping at Save-A-Lot.
It's the closest grocery store to her house, but it's also the cheapest.
"I'm on disability and really have to watch how I spend my money," Duffey said. "At Publix, I'd spend $200 a month for groceries. At Winn-Dixie, I'd spend probably around $150. But at Save-A-Lot, I'll spend $80 for the same amount of food."
Previous coverage: Grocery wars: How many supermarket chains can Florida handle?
Save-A-Lot has operated supermarkets in Florida since the '80s, managing mostly to fly under the radar. But in recent years, the Missouri-based discount grocery chain known for its discount prices and private labels on staple items from milk to spaghetti, has moved into Florida in a big way. Save-A-Lot made a push to double its number of stores in the southeast in 2009, and within three years opened 100 stores, including dozens more in Florida and a second distribution center. Florida is now Save-A-Lot's largest market with more than 150 stores.
The company's stores are smaller than the average Walmart or Winn-Dixie, and they're often located in older shopping centers in parts of town where Publix Supermarkets has avoided. Because of this, coupled with Florida's average wages still lagging behind the national average, Save-A-Lot has been able to carve out its own niche.
"Groceries are relatively inelastic in that people can eat less, but they still have to buy food," said Steve Kirn, a lecturer who teaches classes on retail at the University of Florida. "Save-A-Lot is attractive because they are often the only grocery stores in a low-income market. But no matter where you live, their prices are pretty attractive."
Save-A-Lot began opening stores in Florida in the mid 1980s. Most of their early locations looked like a hybrid between a grocery store and a convenience store, and were found mostly in rural communities like Plant City and Brooksville.
"Our goal is to be a neighborhood grocery store, which means we serve people who live within two to three miles of the store. Not that shoppers can't come from farther away, but the model is based off providing access to groceries to those who live in a close proximity," said Chon Tomlin, spokeswoman for Save-A-Lot. "The theory is that if you have to run up the street to get a gallon of milk, we want you to come to Save-A-Lot. We'll have the lowest prices on those core, staple grocery items and we're the closest to home."
The company's business strategy has stayed the same even with its rapid growth. Save-A-Lot has opened more urban stores, including several in Tampa, St. Petersburg and Clearwater, but they still serve areas that are often considered "food deserts," or densely populated communities where it is difficult to buy affordable or good-quality fresh food.
"Save-A-Lot almost has no direct competitor because its business is mostly stock dry items and the model is based on convenience and price," said Jeff Green, a retail analyst based in Phoenix. "Everyone else focuses on organics or fresh produce or customer service."
Related coverage: Can all these new delivery apps like Instacart and Google Express survive in Tampa Bay?
Many of the shoppers who buy from the Save-A-Lot store on Gulfport Boulevard in southern Pinellas County walk or ride bikes from their homes nearby. The store is located in a mostly empty shopping center with a Family Dollar store next door and a handful of other independent stores. However, the Save-A-Lot store stays busy nearly all hours of the day. In a marked contrast to the atmosphere of a typical suburban supermarkets, an armed security guard stands at the front of the store.
"By moving into spaces where other grocery stores have closed or in lower-end centers where others won't go, Save-A-Lot is paying a pretty low rent," Kirn said. "That's part of how they make the formula work. They can remodel at a lower cost than building a brand new store."
Customers won't find all the extra perks at a Save-A-Lot that they see at a Publix. There's usually only a handful of employees working at the store at time. There are only four cash registers though usually only two are open at a time. Shoppers have to bag their own groceries. And most goods for sale are shelved in the cardboard boxes that they were shipped to the store in. There's no seafood department and the meat section is very modest compared to other grocery stores. Baked goods are prepared off site and shipped to the store.
"Save-A-Lot is a convenience-oriented shopping trip," said Green, the retail analyst. "It's very price oriented too. But it's for people shopping for a few things at a time, not a huge shopping trip, even if the number of customers they have in a day can be fairly high."
This "lean efficiency" model helps keep costs down so Save-A-Lot can sell items at a greater discount, Tomlin said.
"Our stores employ about 20 people, and everyone is trained to do every job instead of just being tied to one function," she added.
Save-A-Lot stores don't sell the popular name brand names seen in most other supermarkets, like Kellogg's cereal or Chobani yogurt. Instead it sells its own private label on all goods, from tomato sauce to paper towels. It's another cost- cutting measure the company capitalizes on, one that has been fairly easy to do thanks to a longtime ownership by SuperValu, one of the largest wholesale grocery companies in the country. SuperValu announced in October that it will sell Save-A-Lot to Onex Corp., a Toronto-based private equity investment firm, for $1.37 billion.
Unlike other grocery stores, Save-A-Lot offers its own franchise-type ownership program. About 75 percent of the company's 1,400 stores are owned by licensees, who own and operate the grocery store under Save-A-Lot's leadership.
But Save-A-Lot's secret might be out, as competitions heats up in the low-cost niche in Florida.
Adli, a German discount grocery chain, is opening stores in Florida at a rapid rate. While most stores are built brand new from the ground up, they often serve the same of kind of communities that a Save-A-Lot or a Walmart would, and are known for their discount prices. Lidl, another German value brand, is expected to make a big push into the U.S. for the first time this year.
"Some of these more traditional grocers, like Winn-Dixie and Publix, are starting to get hit on the lower end by discount stores like Save-A-Lot. It's one of the fastest growing segments of the supermarket industry, with newcomers like Adli continuing to grow and Lidl coming into the U.S.," Kirn said. He noted that Winn-Dixie's promotion to rollback prices on staple items last year was a move to keep their value-based shoppers. "There's clearly a big market here for house-branded items offered at a discount. Publix and others are going to start feeling the heat."
Back in Gulfport, Duffey says she sees no reason why she'd ever stop shopping at the Save-A-Lot close to her home.
"I've never bought piece of produce that wasn't fresh and the store is always clean," she said, adding that most of the tenants in her nearby apartment building shop there too. "I wish they would remodel the store to make that center nicer, but it's Save-A-Lot. They're not going to, and that's OK."
That’s it—Aldi’s stock is not standardized and I am vain of my cooking and have to have certain brands of butter, Lucks brand great northern beans. Etc. I am NOT a snob. Shopping low-rent used to be a passion of mine...consignment, etc. Aldis has an amazing wine selection because it is always changing. Aldi—I like the clientele of Aldis — better class of people than Walmart’s.
Aldi is much better than Save-A-Lot.
...
Aldi’s really good if you know what to get, and there are websites dedicated to that. However there’s one not too far from me, it’s in a fairly good area, but the inside of the store is super ghetto.
There’s a Trader Joe’s a couple of blocks away from that Aldi’s and it’s much nicer. The difference is the clientele.
Absolutely—these are the very foods that cause obesity—and I always loved hamburger helper in early marriage days—but I burned off the calories, too. These processed prepared dinners are high in sugars. But everyone is too lazy to cook.
I have a Trader Joe’s close by, and that place gives me hives, full of the local liberals clogging the aisles with no concern for those trying to get past them. I guess it’s about location.
Some things no, some things yes.
Some times no, some times yes.
Aldi is a very good store but no store always has the best price on comparable items all the time.
Sometimes with the Publix Buy-One-Get One they offer the best value.
We try to take advantage of the best opportunities to stock up no matter which store it may be at.
SAV-A-LOT is NOT cheaper than Aldi.
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... and SAV-A-LOT store brands aren’t equal to the national brands , I’d say they’re the same poor quality as Winn Dixies store brands ,, Aldi is my first stop for price and quality.
WOW!!!
That's outrageous!
What is the cause for such a high tax on food?
Are your property taxes or other taxes lower to compensate?
We shop Aldi weekly. There’s a new competitor called Lidl that’s just starting. ......................... I’m waiting for Nieto and REAL to appear. (Wishful thinking)If only they would have the same beer, perogie, and bakery choices they have in Europe.
Fr'instance....I like a particular name brand of black beans. They taste better, and are lower in sodium than other brands. I've found the store brands, in some cases, to be inedible. So....I spend 30c (or so) more, and I get something that I know will be good, and not just thrown away.
Ditto for other foods, and consumables like toiletries, Paper Towels, and so on. I know what works. Certainly willing to try other things, occasionally and in small quantities, but don't want to replace them all entirely.
If the store doesn't consistently stock items, I'm not going to risk a week's grocery budget on a dice roll. Nothing snobby about it.....
And, I've found that WM is good for prepared food (cereal, chips, soda, etc etc etc. Stuff that I shouldn't eat). Wouldn't buy meat and produce there if they paid me, though. Good prices, but it's mostly all Mexican or from Central America. Contrast that with my usual grocery store, where things - except in the deep off-season like right now - are generally grown in the USA. :-)
I’m betting the black beans you like are Bush—they’re my favorite. But now you can buy them in quantity at Sam’s for a nice discount. I don’t like Bush pintos—once again, it’s Lucks.
To suggest that Publix does not know the grocery business is ridiculous. They have had to address several challenges (Target, WalMart, Costco, etc.) and they continue to grow. Next challenge they will face may be from Amazon. If Sav-a-lot is a threat they will figure out how to handle that too.
I suspect that some neighborhoods are not profitable enough, and when you consider the risk to life and limb in some parts of town it makes a lot of sense for Publix to stay out.
Also, Publix needs to have a certain minimum size for a store to work with their model. So when you add in parking and access to the highway there are some locations that don’t make sense.
I don’t shop in Winn Dixie, except for beer ;-) ... but there are still a lot of WD stores out there.
I can understand working couples resorting to quick easy-to-prepare meals from time to time but I don’t understand the unemployed welfare class doing this. They have all the time in the world to cook from scratch and yet not many of them choose to do so. What do they do with all their time? Rhetorical question as the ugly truth is they sit on their asses watching television all day and couldn’t be bothered preparing a proper meal.
Who suggested that?
If Sav-a-lot is a threat they will figure out how to handle that too.
Neither Sav-A-Lot, Aldi or Walmart seem to be a serious threat to Publix so far.
Publix has carved out it's own niche and has built tremendous customer loyalty from what I have seen.
Many if not most store brands are packaged right along side the same production lines as the National Brands. Often times the only difference is the label.
I spent many years calling on food manufacturers and there are lots of private labels going out of National Brand manufacturing facilities and vice-versa.
Sometimes, but not always, they can change some parts of the recipe.
Goya Black Beans all the way.
We recently got Publix here. Remember them from Miami and wanted them here, Raleigh.
We shop there some. Their meat is terrific. Catch the ribeye steaks on sale, esp. their Angus Greenwise. As good as any you get at Ruth's Chris or similar.
That’s right. Goya cans good little red “cranberry” beans, too.
Many if not most store brands are packaged right along side the same production lines as the National Brands. Often times the only difference is the label.
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True , I drove a truck for a few years and picked up store brands at national brand packers. Save-a-Lot and Winn Dixie have inferior store brands ,, Aldi, Publix and Albertsons/Safeway prioritize the quality when choosing vendors. You can often determine who packs what by the plant identifier section of the barcode (first 6 digits).
The local Sav-a-Lots got bought out and replaced by Grocery Outlet which is even cheaper. I go there for coffee and eggs. Both are cheaper and the eggs are all local or near local produce and much fresher. I bought jumbos there for .68 a dozen while larges were priced at almost 3 dollars elsewhere. And did I say FRESH?
Wife used to refuse to enter the Sav-a-lot(and later the Grocery Outlet) because its where poor people go. Well the Publix was closed and WalMart too far so she went there finally and noticed that she got through the lines faster and it was less cluttered and cheaper. She decided she likes it.
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