Big Supermarkets Crowd Out Small Grocers

Large grocery store chains are pushing smaller, all-in-one grocers off the playing field.

January 22, 2013

ROCKVILLE, Md. - Magruder??s, a small, family-owned chain of four locations, recently announced its departure from the supermarket business after being around since 1875. The demise is linked to a larger trend of big-box grocery stores wedging out the smaller supermarkets, the Washington Post reports.

Small grocery store chains are finding it more difficult to compete with larger supermarkets, especially on selection and price. "There is just too much competition to try to take on the big-box stores, because they can kill you on prices and variety," said Geoff Brown, principal at Bond Beebe. "Unless you happen to be in a very unique location, in order to survive I think these small stores are going to have to be specialized."

Over the past 20 years or so, locally owned grocery stores were able to thrive even with large chains like Giant and Safeway in the neighborhood. But competition has heated up, especially with the entry of Whole Foods, Wegmans, Trader Joe??s and Harris Teeter into smaller markets, not to mention Walmart and Target expanding fresh foods.

"This goes well beyond the grocery and supermarket industries ?" everywhere you go, you see the same stores, the same restaurants, and places like Magruder??s are just having a difficult time surviving," Brown said. "On the other hand, the organic stores certainly have their niche, and the Hispanic and Italian markets ?" I think those will continue to exist."

The problem could be that there are now more big-box options with more products and cheaper prices than a small, family-owned grocer could have or offer. "It??s just an outdated model, and it??s time has come and gone," said Barry Scher, a former Giant spokesman.

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