Crain’s Chicago Business reports on how discount grocer Aldi is “mounting an aggressive expansion in Chicago,” posing a threat to Supervalu-owned Jewel.
“By yearend, Aldi is set to have more stores in the city than any other grocer,” Crain’s writes. “When it completes three locations now under construction, it will have 37 stores inside Chicago to Jewel's 35.
“To be sure, Jewel remains the biggest grocer in town from a sales perspective: A typical Jewel store is estimated to bring in roughly $30 million in annual revenue, about six times more than an Aldi. But as the grocery sector gets more crowded and shoppers trim spending, Aldi represents a growing competitive threat to Jewel, long the dominant player in the Chicago market.”
“By yearend, Aldi is set to have more stores in the city than any other grocer,” Crain’s writes. “When it completes three locations now under construction, it will have 37 stores inside Chicago to Jewel's 35.
“To be sure, Jewel remains the biggest grocer in town from a sales perspective: A typical Jewel store is estimated to bring in roughly $30 million in annual revenue, about six times more than an Aldi. But as the grocery sector gets more crowded and shoppers trim spending, Aldi represents a growing competitive threat to Jewel, long the dominant player in the Chicago market.”
- KC's View:
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One of the interesting things about the Crain’s story is that it notes that Jewel says that it has slashed prices up to 20 percent this year in order to remain competitive. This made me think about an email that I posted last week here on MNB, from a supplier to Supervalu-owned Albertsons in Southern California, who wrote, “The most recent edict to Albertsons-SoCal from the corporate headquarters at Supervalu is 75% pass through of all promotional allowances, no exceptions. Prices wall to wall jumped up while advertising ‘1000’s of prices reduced!’ from banners hanging across the store fronts.”
So I guess the question that needs to be asked – and while I don't know what the answer is, I suspect somewhere out there does – is whether Jewel has really cut prices…or if it is just saying so.
