Crunching The Numbers

PG once again tallies up the top 50 U.S. supermarket operators while spotlighting “Retail Visionaries” at four of the top-10 companies.

Struggling to expand market share and drive sales and margins amid rising costs and cutthroat competition, the nation's most productive food retailers are focused on cultivating growth with sharper stores, more consumer-centric strategies and greater use of retail technology throughout their operations.

Indeed, the chains that are doing the best overall job of competing in a brutal environment — profoundly characterized by value-driven consumers, escalating fuel prices, high unemployment and volatile commodities — are gaining clout by perfecting the delicate balance between price, selection, convenience and service. As the best response to slow growth is innovation, the past year has brought forth a host of novel approaches from many of the leading companies profiled in PG's annual Super 50 countdown of the nation's top supermarket operators, including more data-rich promotional programs, demographic-specific targeted campaigns and tailored store formats that better connect with local customers.

In terms of the brass-tack facts revealed in this year's Super 50 synopsis, while the rankings of the vast majority of contenders largely speak for themselves, there were a few noteworthy changes unearthed, beginning with the total count of retail food stores hovering for the first time at nearly 20,000 (19,810 to be exact), an increase of roughly 140 units from last year's 19,671, or a 0.7 percent gain.

The methodology used for PG's annual Super 50 study is based on all-commodity volume (ACV) information from Nielsen TDLinx, which collects and maintains store information across all channels selling consumer packaged goods. The extrapolated information will likely differ from the published sales data of some companies, including those that are publicly traded, since it focuses solely on sales in supermarkets. As an annualized range of estimated retail sales volume of all items sold at a retail site that pass through the retailer's cash registers, TDLinx uses FMI's broad definition of a supermarket, which is a grocery store with a minimum of $2 million in annual sales. Further, TDLinx ACV data omits sales from convenience, drug and other formats, such as warehouse membership clubs like Sam's, Costco and BJ's, that may be part of total revenue for some companies. (A more extensive explanation of the methodology used for the Super 50 report appears on page 26).

Of the total 19,810 supermarkets included in this year's annual Super 50, the top-10 retailers comprise 12,627 store locations, up 46 units from 12,627 last year, good for a 0.4 percent gain. Not surprisingly, the top-10 leading retailers comprise nearly two-thirds — or 63.7 percent — of the total Super 50 store count, on par with last year's 64 percent tally. With 95 more stores added to its count this year, Walmart controls 15.2 percent of the Super 50 store count, while runner-up The Kroger Co., which had 2,460 stores — or 10 fewer on its tab this year vs. last — holds 12.4 percent of the total pie. Also retaining its third slot among the nation's leading supermarket companies is Safeway, with nearly 1,461 stores and 7.6 percent of the total count.

As a composite, the entire field of Super 50 competitors racked up a total ACV of $492.7 billion — down by $7.6 billion after reaching $500 billion for first time last year. Further, the top-10 retailers control $367.6 billion of total supermarket ACV, down $2.4 billion from $370 billion last year, or the equivalent of 74.6 percent of total Super 50 ACV vs. an even 74 percent last year.

While a quick scan of the rankings of the Super 50 finds no big surprises among the major players, discernable shifts are nevertheless evident upon closer review of the top-20 retailers, beginning with 195-store Meijer, which moved up to rung No. 9 on the top-10 leader board. Whole Foods Market, meanwhile, with 293 stores, leapfrogged two spots ahead on the top-supermarket hit parade to earn the 10th slot in this year's study, from its previous No. 12 slot.

Winn-Dixie, now in 12th place, dropped back from its previous ranking at No. 11, while Hy-Vee, which now holds the No. 17 spot, also moved up two pegs. Additionally, Save Mart Supermarkets slipped back one notch to No. 18, and Albertsons fell two spots to 20, from its former 18.

The biggest mover and shaker in this year's annual study is Wakefern Food Corp./ShopRite, which vaulted six spots this year to 29, from its former 35.

METHODOLOGY

Progressive Grocer's 2011 Super 50 is based on information from Nielsen TDLinx, which collects and maintains store information across all channels selling consumer packaged goods.

This list will not agree with some companies' published sales, since it specifically focuses only on sales in supermarkets. TDLinx uses the Food Marketing Institute definition of a supermarket: a grocery store with a minimum of $2 million in annual sales. It omits sales from convenience, drug and other formats that may be part of total revenue for some companies. Wholesale membership clubs such as Sam's, Costco and BJ's are also not included.

Supercenters are included, but only for their grocery-equivalent merchandise. Not included are soft goods; clothing; general merchandise such as hardware, appliances, computers and auto service; and other items not common to supermarkets.

Sales are presented in terms of all-commodity volume (ACV), an annualized range of the estimated retail sales volume of all items sold at a retail site that pass through the retailer's cash registers. TDLinx ACV is an estimate based on best available data — a directional measure to be used as an indicator of store and account size, not an actual retail sales report.

All data is collected by TDLinx from a wide range of independent sources, and then enhanced with computer modeling. Information shown is from the March 2011 database. Square footage includes only public selling areas; it does not include gross-leasable or storage space. Full-time equivalent employees are the sum of regular workers plus one-half the number of part-time employees.