business news in context, analysis with attitude

Good piece in the St Louis Business Journal about how Schnucks and Dierbergs continue to dominate the area’s grocery marketplace, despite the fact that “supercenters, wholesalers and big-box retailers such as Wal-Mart, Sam's, Costco and Target are making advances with a high-volume, low-price business model. Specialty food retailers, including Whole Foods Market, Trader Joe's and Wild Oats, also are luring consumers away from traditional grocery stores.”

The paper notes that “Dierbergs carved out a niche toward the upscale and has focused on providing a greater variety of merchandise and a wide selection of produce, meats, cheeses, flowers and other perishables” and that “Schnucks has a similar plan to counter Wal-Mart with an emphasis on broader product variety and cleaner, nicer stores.” Both companies, according to the Journal, “are longtime innovators. They have been among the first groceries in the region to incorporate specialty in-store offerings and services such as floral departments, video rental centers, pharmacies, bank branches and cooking schools, for example.

“Today their stores are offering an increasing number of nongrocery items -- such as magazines and books, school supplies, even patio furniture -- typically offered by supercenters. Some Schnucks and Dierbergs have incorporated new organic and specialty grocery aisles to cater to shoppers lured by Whole Foods Market.”
KC's View:
The key to both companies’ success, we would guess, has much to do with the fact that there remains strong family control of each, which makes the stores both more responsive, nimble, and accountable.