STORES’ Top 100 Retailers List Reveals The Importance Of Offering Food

August 09, 2012

Big-box retailers from Walmart to Meijer are shrinking store sizes even as other operators such as Dollar General are opening larger units, noted STORES' Top 100 Retailers list, reports The Food Institute.

Big-box retailers from Walmart to Meijer are shrinking store sizes even as other operators such as Dollar General are opening larger units, noted STORES’ Top 100 Retailers list, reports The Food Institute. Drug-store chains Walgreen, ranked number four,  and Number seven CVS Caremark continue to expand their food offerings, while supermarket operators from No. 2 Kroger to No. 37 Whole Foods Market are emphasizing health and nutrition. 

According to Kantar Retail insights director Anne Zybowski, Walmart will add about $60 million in sales over the next five years (about 3% a year). But for now, Wal-Mart remains the top U.S. retailer overall, and for food, with $316 billion in sales in the United States and $454 billion worldwide. 

The U.S. has entered the era of the national supermarket chain as Safeway, Kroger and SUPERVALU have expanded into multi-regional operators while maintaining locally recognized banners. Emerging from the pack, however, are three retailers who use the same name in every market: Whole Foods Market, Aldi and Trader Joe’s, the last just missing the power player chart because its $7.3 billion estimated sales aren’t quite 10% of category leader Kroger’s $77 billion. Whole Foods may not have a presence in every major market, and Aldi has not moved all the way west, but they do continue to grow in the face of increased competition from alternative food retailers ranging from Walmart and Costco to dollar, drug and convenience stores. Operating in an inflationary environment where year-over-year food prices rose nearly 6%, according to The Food Institute, Whole Foods and Aldi took entirely different paths in achieving double-digit sales gains. Whole Foods caters to affluent shoppers with its array of natural and organic offerings while Aldi, the American arm of a German conglomerate that also controls Trader Joe’s, now has a presence in 31 states, operating stores much smaller than Whole Foods’ with a very limited assortment of groceries.

Small Format stores On A Roll

Dollar store is a misnomer for the likes of Dollar General, Family Dollar and Dollar Tree. A better description is convenience discounters, since the low unit prices are attractive enough to steal consumer shopping trips from big-box discounters. Dollar General passed the 10,000-store milestone en route to its goal of opening 625 new units this year. Chief competitor Family Dollar is cutting the ribbon on 500 new stores this year, which will give it more than 7,500 by year’s end. Food has been a major factor in dollar stores’ ability to lure shoppers, as both Dollar General and Family Dollar re-tool their merchandise mixes to find more room for groceries. Both chains strive to address the so-called “food desert” issue in urban areas while repositioning themselves as “the new general store,” as Dollar General’s CEO put it. 


In the quick-serve universe, McDonald’s still tops the list. Although Subway has more restaurants than McDonald’s, the burger chain’s share of the quick-service market is about 17% – roughly equal to those of Subway, Starbucks, Burger King and Wendy’s combined, according to Technomic. McDonald’s has budgeted nearly $3 billion for expansion this year, including opening some 1,325 new locations and remodeling others as the company strives to grow sales 3% to 5%.  Five years ago, McDonald’s owned and operated nearly a quarter of its restaurants flying its banner, but like most large franchising operators, McDonald’s reduced ownership to about 19% of its stores. The average franchisee owns five or six units. According to FRANdata, a service of Franchise Information Services, there are 38,390 single-unit food franchisees in the country operating 23.8% of franchised restaurants. Wendy’s passed Burger King as the country’s second-largest burger chain even as it sold off Arby’s. Carrols Restaurant Group spun off Pollo Tropical and other brands in order to acquire another 278 Burger King locations. Subway plans to open another 1,200 North American locations this year; YUM! Brands’ largest Pizza Hut franchisee, publicly held NPC, acquired another 36 units and now operates nearly 1,200 across the country.