Schnucks Bows Out in Memphis
Schnucks was always seen as a long-shot bet when it entered the Memphis market. Hindsight being 20-20, we now know the gamble didn’t pay off as the chain has sold most of its stores to Kroger and left the area.
Schnucks originally entered Memphis in 2003 when it purchased 12 stores from Albertsons. The locations had originally been owned by Seessel’s, a long-time fixture in the area. At the time it entered Memphis, Schnucks’ new stores accounted for just under 12 percent of the market, accordng to Trade Dimensions, while Kroger (40 percent) and Walmart (16.5 percent) were on a growth path.
At the time, Michael Collins, vice president of retail at Bain & Co., told the St. Louis Post-Dispatch, "It’s very aggressive to enter the market with an established No. 1 and No. 2. There is a high level of risk."
One reason given for Schnucks’ failure was that it wasn’t enough like Seessel’s. Jennifer Biggs, a columnist for The Commercial Appeal, wrote, "They promised to bring back Seessel’s recipes, which they did, in a limited way, at the beginning…"
Ultimately, however, Schnucks was Schnucks and not Seessel’s. "I don’t believe Schnucks really could deliver what we wanted. And of course, what we wanted was Seessel’s, so it was a losing game for everyone."
Lori Willis, a Schnucks spokesperson, told the Post-Dispatch, "In the last couple of years, we’ve noticed our (market) share drop off, and we didn’t see any way to turn that around. … It came down to how many grocery retailers will one market support."
- Schnucks Rockin’ and Rollin’ in Memphis – RetailWire
- Tough competition forces Schnucks to exit Memphis area market – St. Louis Post-Dispatch
- Whining and Dining: Seessel’s still looms large over grocery landscape – The Commercial Appeal
Discussion Question: What lessons can be learned from Schnucks’ experience in Memphis?