Schnucks Rockin’ and Rollin’ in Memphis

Discussion
Mar 25, 2003
George Anderson

By George Anderson


Albertsons may have gotten the blues trying to do business in Memphis, but Schnucks expects to be rockin’ and rollin’ in Elvis’ town.


Schnucks entered Memphis last year when it purchased 12 former Seessel’s stores from Albertsons. The retailer also has plans to spend an additional $40 million building three shopping centers with a Schnucks store serving as the anchor.


As one of the most respected and well-run regional supermarket chains in the country, it is not surprising to see Schnucks grow from its St. Louis base.


What surprises some, says a St. Louis Post-Dispatch article “is not that Schnuck is willing to spend money, but rather where. Kroger Co., the nation’s largest supermarket chain, controls nearly 40 percent of the metropolitan Memphis market; Wal-Mart Stores Inc., the largest food retailer in the United States, has 16.5 percent, according to Trade Dimensions International Inc., a research firm in Wilton, Conn. Schnuck inherited an 11.6 percent market share, good for third place.”


Michael Collins, vice president of retail, Bain & Co., told the 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.”


Moderator’s Comment: Will Schnucks be successful in
capturing a greater share of grocery sales in Memphis?


Kroger did not get its 40 percent market share by accident
but it has its hands full dealing with Wal-Mart.


The Schnuck brand positioning, on the other hand, should
keep it clear of most direct comparisons with Wal-Mart.


We have to admit being a bit concerned by a comment made
by one of Schnucks’ Memphis shoppers. “There has not been as huge a difference
(between Schnuck and Albertsons) as I would have hoped.” Lets hope that the
Schnuck team learned from Albertsons’ mistakes. [George
Anderson – Moderator
]

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