Texas Is Becoming a Grocery Hotspot
It’s a good thing there’s a lot of space in Texas, because many grocers are putting down stakes or expanding their roots in the Lone Star state.
In the bustling Dallas-Fort Worth area, homegrown chain H-E-B continues to build new stores, while The Kroger Co. is busy planning three larger-format Kroger Marketplace stores in the Metroplex and Costco Wholesale Corp. is also investing in a new site. Grocery growth is also robust in Houston, where Gordon Food Service is set to add six new locations and where independent grocers like Little Red Box Grocery are opening new outposts. Food retailing competition is also heating up in the fast-growing city of Austin, as operators like H-E-B, H Mart, Foxtrot and Tiny Grocer are widening their respective footprints.
Data from Placer.ai shows that shoppers in that state support their grocery businesses. According to Placer.ai’s foot traffic information, visits to grocery stores in Texas were up 4.8% in the last quarter of 2022 compared to pre-pandemic levels.
While H-E-B is a top Texas chain, other grocers are making inroads there as shoppers get more choices. Placer.ai reported that growth in visits to Trader Joe's reached 18.5% in the third quarter of 2022 and 8.5% in the fourth quarter. ALDI has also continued to expand its customer base there and now operates 126 stores in Texas.
ALDI stores are resonating with Texans seeking value at a time of high inflation, the company recently reported. “Our ability to offer the best products at the lowest prices has allowed us to attract a new customer base in Texas. We welcomed 400,00 new customers into our Dallas and Houston stores in 2022,” said Karla Waddleton, divisional VP for the Batavia, Ill.-based retailer in a recent interview with Progressive Grocer.
Waddleton agreed that Texas can be considered a microcosm when it comes to trends, particularly at a time of high overall prices. “In Dallas, the Consumer Price Index for food at home is on-par with the national average increase at nearly 10% in February. However, in Houston, food prices are outpacing the national increase, and up 13% year-over-year,” she remarked.
As for what they are buying, Waddleton shared some insights based on ALDI's customer shopping trends in that market. “Dallasites and Houstonians love their avocados! More avocados – five million-plus – are purchased in Dallas and Houston ALDI stores than in any other ALDI market,” she said.
According to Waddleton, other popular items in Dallas include strawberries and whole milk. Further south in Houston, chicken breasts, strawberries and seasonal sweets are customer favorites, while fresh Atlantic salmon is the top seafood seller in both metro regions.
Meanwhile, news about additional grocers coming to the state continues. In early April, the Dallas City Council approved an incentive package for Albertsons Cos. to add a new Tom Thumb store to Dallas.
