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Retail Trends

Food/Drug/Mass Value

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Best-of-class and unique operating propositions dominate the food/drug/mass value segment — even as No. 1 Kroger is the very definition of the exception that proves the rule (which, in this case, is that traditional supermarkets are a dying breed).

Walgreen has been energized by its Duane Reade division at a time when its national drug chain rivals are struggling. Rite Aid is still trying to find solid footing, and CVS Caremark is fending off union-fueled opposition and critics of its takeover of pharmacy benefits manager Caremark Rx.

Then there are the niche players carving out space for themselves by re-defining the consumer shopping experience. Whole Foods Market owns the natural and organic approach to grocery retailing. Its stores are “destinations” from the moment they open in most markets and its competitors, whether local chains or large national operators, have been playing catch-up for years. Safeway and SUPERVALU, in particular, have been falling over themselves trying to win back shoppers partial to the natural and organic proposition.

Aldi also operates in the supermarket sector, but in a world away from Whole Foods. The German-owned chain runs small-footprint stores with limited assortments, operating hours and frills. Chain officials concede that consumers might not be able to make all the purchases on their weekly grocery lists, but shoppers do love Aldi’s value proposition.

H-E-B is an iconic supermarket chain that has cut a unique swath through Texas and the Southwest for more than a century, while equally nonpareil Wegman’s has achieved star status as it fans out from its base in upstate New York.