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10/18/2022

Why These 3 Super Regionals Continue to Win Share

A few regional grocers are thriving by finding ways to outsmart big players
Gina Acosta
Editor-in-Chief
Gina Acosta profile picture

As the grocery industry weathers consolidation and digital disruption, a few regional grocers are thriving by finding ways to outsmart big players, scale while keeping costs down and create a hyper-localized customer experience that’s highly differentiated. 

Specifically, grocers such as Publix Super Markets, H-E-B and Meijer all stand out as Progressive Grocer Super Regionals because they offer first-rate customer service, innovative omnichannel options and assortments that create shopper loyalty for life. 

[Read more: "Which Food Retailers Are Among America’s Most Innovative Companies?"]

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Publix Bakery
Publix began offering a bakery department in 1957. Today, the company offers more than a dozen scratch-made varieties, including some original recipes.

Publix Super Markets

$48 billion in 2021 revenue, 1,300 stores 

At 7 a.m. on Aug. 4, Lakeland, Fla.-based Publix Super Markets quietly opened its 1,300th store. The little-publicized opening in the fast-growing city of Crawfordville in the Florida Panhandle came a little over a month after the company broke ground on its first store in Kentucky – another quiet milestone for a grocery chain that’s on an aggressive push north- and westward.

At the ground-breaking in the Bluegrass State, Publix CEO Todd Jones said: “It’s an exciting day for Publix Super Markets as we break ground in our eighth state. When our founder, George Jenkins, opened the first Publix store, he wanted to create a better grocery store — one that kept associates and customers top of mind. More than 90 years later, we’ve kept true to our values, including supporting the communities in which we live and work. We look forward to sharing the Publix difference with Kentuckians.”

The Publix difference is knowing your customers and treating them very, very well. When a shopper walks into a Publix store, everything, from the floors to the checkouts to the bathrooms, is sparkling clean. The employees greet shoppers walking into the store with “Good morning, welcome!” The shelves are stocked, and everything is in its place. It’s not unusual to find the store manager sweeping the floor or checking out a customer or emptying a trash can or carrying groceries to a shopper’s car. Everything that Publix does is all about Southern hospitality and convenience, and not spending a lot of time or money on fancy prepared foods, oversized stores or robotic fulfillment centers.

The Publix difference has resonated so well with shoppers that the Florida chain has been expanding north for years as it looks to woo non-Southerners with its unique brand of down-home differentiation. At the end of 2021, the company operated 60.9 million square feet of supermarket space. The company’s supermarkets vary in size, but current prototypes range from 28,000 to 55,000 square feet. Stores are often located in shopping centers where the company is the anchor tenant (the majority of the company’s supermarkets are leased). The company supplies its supermarkets from nine primary distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Fla.; Lawrenceville, Ga.; and McCalla, Ala. A new distribution center is currently under construction in Greensboro, N.C., which could fuel the grocery chain’s expansion. In any case, there’s no sign of a growth slowdown for the country’s largest employee-owned company and its 225,000 employees. 

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H-E-B
The new H-E-B in New Braunfels, Texas, features nearly 30 staffed checkout lanes, plus self-checkout, as well as the first Home by H-E-B department.

H-E-B

$34 billion in 2021 revenue, 420-plus stores

When San Antonio-based H-E-B opened a new store in New Braunfels, Texas, in 2021, it wasn’t enough to have 122,000 square feet of sushi; meal kits; house-made tortillas; a full-service pharmacy; Texas-themed furniture and home décor; fresh meat and dairy; a produce section with organic, locally grown and fresh-cut, ready-to-serve fruits and vegetables; and a floral department with certified floral designers. The store also had to have a barbecue drive-through. Well, not just a barbecue drive-through, but a two-story True Texas BBQ restaurant with two-level indoor seating, contactless ordering kiosks, and a window serving up brisket, sausage and “dinosaur-sized Texas beef ribs.”

H-E-B expertly taps into Texas pride and the saying that everything really is bigger in that state, and shoppers eat it all up. The grocer’s recent expansion includes two nearly constructed locations in the Dallas-Fort Worth metroplex, in Allen and Mansfield, which are set to open next year. The grocery chain is also adding frozen capabilities to its distribution facilities in Temple, Texas, in an effort to grow its current facility footprint by 325,000 square feet.

Earlier this year, H-E-B opened a 50,000-square-foot e-commerce fulfillment center in the central Texas town of Leander. The facility is expected to employ 150 people and will also feature various forms of automation to pick and carry out the grocer’s home delivery and curbside orders throughout the region. This is H-E-B’s fifth e-commerce fulfillment center to be built since 2018, and the company has plans to open additional facilities by the end of next year, including one in Plano that will service the Dallas-Fort Worth market.

“At H-E-B, we’re always looking for ways to offer Texans a better shopping experience and more options to choose how they shop, pay for and receive their products,” says Kedar Patel, VP of e-commerce. “Across our business, we are adopting innovative technologies that give our partners the tools they need to provide top-quality service to our customers, whether they shop online or in our stores.”

The grocer opened its second store in Leander late last year and added an H-E-B Wellness Primary Care center to its first Leander location in May. In June, H-E-B revealed that it would donate $10 million to help build a new elementary school in Uvalde, Texas, where a shooter killed 19 children and two teachers this past May. Last month, the grocer said that it would invest $10 million to remodel its store in that town.

Meijer Inc.

$25 billion in 2021 revenue, 258 stores

Meijer has a cult following in the Midwest for its supercenters that are open all hours and offer one-stop shopping. In September, however, the Grand Rapids, Mich.-based company made a surprising announcement: It’s going in another — smaller and more grocery-focused — direction with a new format and banner called Meijer Grocery.

The first two Meijer Grocery stores are expected to open in the Detroit area in early 2023 and will aim to provide simple shopping experiences and greater community access to fresh food. The Meijer Grocery locations in Orion Township and Macomb Township will be between 75,000 and 90,000 square feet in size and feature an easy-to-navigate design, both inside and via a parking area that’s wrapped around a singular corner entrance.

In comparison, Meijer supercenters measure up to 220,000 square feet and carry items such as electronics and apparel. Each Meijer Grocery location will feature fresh produce, a fresh meat counter, a full-service deli and a bakery equipped with in-store cake decorators. A pharmacy and health and beauty care area will meet other consumer needs in an easily shoppable site.

“Our customers know they can count on us for the freshest foods and best value, which has always been at the core of what we do at Meijer,” says Rick Keyes, Meijer’s president and CEO. “Meijer Grocery will now provide that same combination of freshness and value in a foods-focused format in your local community.”

Don Sanderson, group VP of foods, echoes that sentiment, noting that the store is equipped to meet the needs of community residents. “We’re excited to provide our customers with yet another way to shop,” Sanderson says. “This new concept store will not only provide our customers with everything they need on their weekly shopping trip, but also a quick and easy solution for when they realize they left the key ingredient off their list while cooking dinner.” 

Meijer’s value proposition of offering convenience, assortment curation and a corporate-level commitment to the community is sure to resonate with a whole new set of shoppers who can now look forward to an easier shop in a smaller format. 

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