Categories: Schenectady County
ShopRite’s re-emergence in the Capital Region isn’t likely to ease the frayed nerves of other area grocery chains navigating the down economy.
The area saw a steady influx of new competition last year. The North Carolina-based Fresh Market made its first foray into the Capital Region by opening a Colonie store in August, while big-box retailer Target added a grocery component to a pair of its area stores in December.
ShopRite and the emergence of other markets could specifically spur some long-overdue competition for Price Chopper, which has reigned as the area’s most prolific grocer for years. Kajal Lahiri, a distinguished professor of economics with the University at Albany, said the steady encroachment of grocer alternatives could ultimately result in a win for consumers.
“The moment some big stores start to come in, they will feel threatened and they will be aggressive in offering sales,” he predicted Wednesday.
The Capital Region once had a number of grocery alternatives, including ShopRite, P&C, Grand Union and Star Market. But those choices were slowly whittled away over the past decade, Lahiri said, leaving Price Chopper with a market share he equated to a monopoly.
“This is not a very good position that has been existing the past 10 years,” he said.
Grocers listed competition from other retailers among their top concerns, according to a study released by the Food Marketing Institute last week. Competition was ranked only slightly lower than the cost of health care and the national economy.
Meanwhile, rising fuel prices and the increased cost of commodities are pushing food prices higher. As a result, shoppers are making fewer trips to the market, with many choosing to forgo the closest market for the one with the lowest prices.
Perhaps that’s why the top threat to grocery chains remains the supercenter. Regional chains reported high levels of concern over new grocers landing in their market, but remain primarily concerned over the impact of retailers such as Wal-Mart.
“Between the proliferation of outlets and the attraction of supercenters’ everyday low prices, especially to low- and middle-income shoppers, retailers point at supercenters as the top competitive worry in the current marketplace,” the study states.
It’s unclear whether Price Chopper will shrug off the new competition or react in a manner Lahiri suggests. Calls to the Schenectady-based Golub Corp. were not returned Wednesday.
Matt Paul, a spokesman for Maine-based Hannaford Supermarkets, said his company remains mindful of any new competition. He said the added pressure could ultimately help his company improve its market share in the Capital Region, where it maintains a modest presence.
“Competition is coming from all angles, but we feel like we’re up for it with our model,” he said. “In a lot of cases, competition helps us sharpen our focus and sharpen our game so that it’s more in line with what our are customers are looking for.”
Don Brisgrove, general manager of the Niskayuna Consumers’ Cooperative, was uncertain how the new ShopRite would impact his store, especially since it is opening only a half-mile away. But he said the co-op is no stranger to competition and doesn’t shrink from a challenge.
“We co-existed with Grand Union for many years,” he said of the now-defunct grocer. “[ShopRite] might bring us more traffic. It could be positive.”
Given its annual sales, the co-op doesn’t seem fazed by the growth of a grocery component in area big-box retailers. Last year, the grocer did $10 million in annual sales, an increase of about 6 percent over the previous year.
Brisgrove credited the co-op’s success to its niche market of loyal clientele. He said shoppers are drawn to the store by its quality products and superior customer service.
“We are so far above what a store this size does,” he said. “We are running as fast as we can.”