United Supermarkets is entering the competitive Dallas grocery market with its upscale concept Market Street. With supermarkets’ share of grocery spending falling to 67% and fierce competition from giants like Wal-Mart, such innovation is necessary to ensure continued success.
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United Supermarkets, a West Texas supermarket chain, is venturing into Dallas suburbs with a two-story 72,000 square foot pavilion called Market Street. Market Street opened in Colleyville on Wednesday and another is planned for McKinney in 2004.
With ‘where everyday meets gourmet’ as its slogan, Market Street is well positioned to enter the affluent and competitive Dallas grocery market. It wraps specialty and gourmet concepts like ‘whole foods’ around a traditional supermarket with its customary bank, pharmacy, photo developing and floral departments. It also offers chef-prepared foods, a wine section with 1600 domestic and imported varieties, a food specialty shop that sells gourmet cookware and a cooking school. The store houses organic and specialty brands alongside traditional varieties and is typically 60% larger than the average US supermarket.
In recent years the Dallas market has become increasingly competitive. Wal-Mart’s share of the Dallas market was more than 16% last year, twice its share in 2001. By year-end 2003 it is expected to rank No.1 in the Dallas area. The big three national chains, Kroger, Albertsons and Safeway Inc’s Tom Thumb are also making tremendous investments in this market. With supermarkets’ share of grocery spending falling to 67%, these stores are facing competition from all sides.
Stores are rising to the challenge by upgrading and expanding service and selection. H.E. Butt offers the Central Market concept. Organic niche leader, Whole Foods has broadened its appeal with prepared foods and expanded gourmet selections. Others are installing gasoline pumps in parking lots for convenience or developing stores such as Carnival that are more relevant to the growing Hispanic population.
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By GlobalDataIn the highly competitive and concentrated grocery market, players like United Supermarkets have realised that innovation is quickly turning from a ‘nice to have’ into a ‘must have’.
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