Grocery Wars: As Meijer Enters Mix, 'Something Has to Give'
Meijer plans to enter Oak Creek and add to a rapidly-crowding grocery market populated by Woodman's, Pick 'n Save, Target, Walmart and others. Is there enough business for everyone?
Since everybody has to eat every day, usually several times a day, there is an inevitability built into the grocery business. There will always be somebody ready to fill that need.
But that doesn’t mean it isn't volatile.
The retail grocery industry is highly competitive, and since the rise of the chain supermarket, it has typically been a high-volume, low-margin business. Demand for food is subject to changing tastes, offers of better service pricing, demographic shifts and and turns in the economy.
Over the past two decades, the grocery business in metro Milwaukee has changed radically, and it is about to change again. Nowhere is that more apparent than in the arrival in the Milwaukee market of Meijer Inc., builder of supercenter stores that focus more on groceries than consumer goods.
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And it's becoming acutely apparent in Oak Creek, with Meijer proposed to anchor the Drexel Town Square development near the corner of Drexel and Howell avenues.
The building would be within eyeshot of Woodman's, just down the street from Pick 'n Save and within a few-mile radius of several other grocery stores.
According to a leading local industry analyst, suburban Milwaukee is about to become the battlefront in a game-changing round of Grocery Wars.
Success draws competition
For years, the Pick 'n Save at the corner of Puetz Road and Howell Avenue was one of the company's top-performing stores.
So it was only a matter of time before a competitor moved in to grab a piece of the pie, said David Livingston, whose firm, DJL, specializes in grocery market research.
That competitor was Woodman's, which opened its huge store at 8151 S. Howell Ave. in 2008. The success has been just as huge: Livingston said the Oak Creek store brings in an estimated $2 million in sales per week, about four times what an average Pick 'n Save does.
But now with Meijer planned for Drexel Town Square, "something has to give," Livingston said.
Pick 'n Save has stores at 6462 S. 27th St. and 2320 W. Ryan Road in Oak Creek, plus one on Chicago Avenue in South Milwaukee.
Walmart has a store at 6701 S. 27th St., and one under construction at 222 N. Chicago Ave. in South Milwaukee. Target is not far from Drexel Town Square at 8989 S. Howell Ave. Nor is Piggly Wiggly at 2201 E. Rawson Ave.
The "market can't support" that many grocery stores, Livingston said.
"It will be an endurance test to see who runs out of money" first, he said.
Woodman's apparently feels pretty safe. According to two Oak Creek officials, the company has told the city it is fine with a Meijer built almost right next door to its Oak Creek location.
Livingston has a guess as to why that might be.
"I think Woodman's thinks Meijer would push Pick 'n Save out," Livingston said. And in the end, Woodman's would be better off than it was before.
Roundy's portion of the pie
In the Milwaukee suburbs — and the entire state of Wisconsin — Roundy's Inc. is the self-proclaimed market leader when it comes to grabbing those groceries.
Milwaukee-based Roundy's operates 161 stores and 97 pharmacies under the Pick 'n Save, Rainbow, Copps, Metro Market and Mariano's Fresh Market banners.
"I think in the whole Wisconsin market, we are the market leaders," said Jim Hyland, Roundy's vice president of investor relations.
However, there's no denying that Roundy’s is sharing real estate with plenty of other grocers hoping to attract customers in the suburbs. Besides the approach of Meijer, Walmart and Woodman's have all aggressively expanded in the suburbs.
Hyland says that's all just part of the business, and it can't steal Roundy's focus on what it does.
"The grocery business is robust, and we get new competition all the time," he said. "We are aware of it, and we focus on the consumer and their experience rather than the competition.
"There will always be competition in this business. But we try to keep our focus on leadership, our brand, and a better customer experience."
Added Roundy's spokeswoman Vivian King: "The bottom line is that the suburban customer wants convenience. They may shop once a week, and we want to provide one-stop shopping for customers."
Meijer prepared for competition
For its part, Meijer sees it much the same way, a spokesman said.
"Our offerings will be something that shoppers in the Milwaukee area will like," said Frank Guglielmi, director of public relations.
Livingston said Meijer is somewhat similar to a Walmart. It doesn't have an automotive department like Walmart, but it does offer clothing, sporting goods, health and beauty products and a pharmacy.
The grocery, meanwhile, is more upscale than Walmart. It has in-store dining options, a better liquor department and service meat and seafood cakes.
"We've developed a format that does well in a lot of different markets, but it's always based on serving the customer," Guglielmi said. "There are a lot of different offerings out there at every level, from price-point leaders to the most upscale. And there's competition at every level, but ultimately the winner is the customer."
"Competition is good for everybody," Guglielmi added. "We're in markets now where there's a lot of competition – we're in Detroit, we're in Chicago. It keeps our game up. We are used to competing in the private marketplace, and we're good at it."
Besides Oak Creek, Meijer has planned stores for Wauwatosa, Sussex and Grafton. Earlier this week, the company dropped plans for a fifth store in Franklin.
It's a lot from a privately held chain that since 1962 — when Meijer invented the supercenter concept — has amassed only 200 stores so far.
But Guglielmi said the company is well-positioned to enter Milwaukee now.
"If you look at our geography, we're already strong in Northern Illinois," he said, "so we're not that far away. It's been well-publicized that we've bought the new distribution center in Pleasant Prairie."
With that purchase, Meijer could be in position to announce even more stores, as Livingston predicts they will.
CBRE commercial properties broker Peter Glaser said that for Roundy's, major competitors — nationals like Walmart and Target and major regionals like Meijer — "haven't been in this market (before), and they see this as a natural progression to enter the suburban market.
"When you have someone who is dominant in the market, there will always be other brands that want to get in."
Leslie Ahern
12:04 pm on Friday, February 1, 2013
I'm originally from Michigan. I love Meijer and haven't been able to find a quality grocery store since I moved here. Pic N Save and Sentry prices are outrageously high. The stores are dark and small and they don't have a lot of variety. Pic N Save has a problem with outdated merchandise on their shelves.
Resident of O.C. Paul
12:05 pm on Friday, February 1, 2013
Wis Park/We Energies and the dolts running Oak Creek at their finest; Ignoring the residents, and doing what they want to do in their quest for lining their pockets with taxpayer money.
It's no longer about who does what is right for the people and the city, or the best job; it's who can walk away with the most taxpayer money in their pocket.
Terri#1
12:38 pm on Friday, February 1, 2013
Well put Paul!
erich roeseler
12:05 pm on Friday, February 1, 2013
we shop at groppies and outpost
Terri#1
12:39 pm on Friday, February 1, 2013
Two very good choices! We should be supporting the small stores. Beans and Barley on the eastside is another that has great variety.
OC Knights Fan
12:05 pm on Friday, February 1, 2013
So, did I miss something? Doesn't the Meier deal have to be approved first? Or, are you just figuring it's a done deal, which, regardless of citizen concern, it probably is.
Mark Schaaf
12:29 pm on Friday, February 1, 2013
Don't know if that's directed to me, but you're right that Meijer has just been proposed, as stated in the story. Not finalized.
Jodi Clemmer
12:05 pm on Friday, February 1, 2013
It is ridiculous to have another grocery store on Howell ave! Bring in a new type of store that we dont have in the area...
Karen
12:05 pm on Friday, February 1, 2013
I personally think that having meijer as an anchor for the Drexel project is a big mistake. We want to bring in unique businesses to that corner and we are not going to attract those with another big grocery store. Everyone I talk to feels the same way. Ikea has been tossed around and that would be a huge draw. People all over southeastern Wisconsin pack up a truck and drive to Illinois to shop at Ikea. We would be attracting lots of money from outside of Oak creek. Woodmans doesn't have a problem with meijer coming to oak creek because it will drive out pick n save. Then we will have a nice big empty store on the corner or Howell and Puetz.
Andy
1:53 pm on Friday, February 1, 2013
The problem is - Internet shopping is changing the way people drive and shop. If I want something from IKEA, I'm not going to drive there and spend money on gas to bring a vehicle large enough to haul it home, only to have to unload when I get home anyway. I'm going to go online, save the gas money, save the time, and have it delivered straight to my door. I'm finding others that do the same.
Macy’s has been brought up as a draw. But I know two people who order from Macy’s ONLINE very routinely, rather than drive to Mayfair to buy it in person. And that's not even very far. But we are constantly stopping in at the multi-use stores, such as Target, because we need cold medicine, or a new pair of warm sweatpants, or a new frying pan, or paper plates for a party, etc. And that has caused us to then visit the smaller stores next door. I wouldn't drive out of my way for Panera, but as long as we're right next door, we'll stop and eat before heading to the next errand, rather than eat fast food in the car.
I noticed my food bills went down when Woodmans opened and Pick n Save had to lower their prices, and then noticed my food bill went down again when I had additional options at Target.
Everyone who has actually been in a Meijer speaks highly of it. I just wish they had been doing some advance marketing (like Lowe's did before they entered the market here) so we would have a better idea of what they are like.
Katy G
12:06 pm on Friday, February 1, 2013
I have lived in Oak Creek since 1989 and I shopped at Sentry until Woodman's in Kenosha opened in 1997. I was thrilled that Oak Creek got a Woodman's 8 blocks from my house so now I don't have to drive as far. I will NEVER stop going to Woodman's so I am disappointed that there will be no diversity for OC - we will become the city of grocery stores. So I guess I will never visit the new town center, I won't need to.
Joe Todor
11:57 pm on Sunday, February 3, 2013
Woodman's DOES have a large variety of brands and products, but the prices are usually higher.
And some the store is TOO big, if I just need one item.
PW is a little out of my way, but I like the store.
John Genders
12:07 pm on Friday, February 1, 2013
Meijer had the best prices in Columbus. They are clean and take great care of there Team Members. They will have many FT positions with bennifits for PT as well.
The company is still owned by the Meijer Family and not on the public exchange. You will tell a difference the first time you walk in the store that the TM are proud to be worki g there.
Terri#1
12:36 pm on Friday, February 1, 2013
Regarding the number of food stores in Oak Creek, Sometimes you just have to say "scr*w it."
Let the stores battle til they "kill" each other. In the meantime consumers should enjoy the "lower" prices that these stores will need to offer to compete.
The death of a store means a now open building and piece of land that OC officials have to once again scratch their heads over and try to fix.
Pick in Save, for anyone of the oldies here that remember when they started, was no more than a huge bare bones warehouse with huge commercial shelving and bulk items. This was a good deal for the consumer. Similar to a Sam's Club. Now Pick n Save has "prettied" itself up and become just like all the rest.
I wouldn't mind seeing Pick n Save sound it's death knell.
I personally have found using PEAPOD more advantageous than any huge grocery store.
The 6.95 that I pay for delivery every two weeks more than makes up for the time going through aisles, standing in lines, gas to drive the store. Not to mention having to fInd time to shop the store. A few clicks of a mouse button and I can have everything ordered, schedule delivery to accomodate my lifestyle and make more time for me. I don't have to deal with moody check out clerks who are being pushed to move quickly because they have 25 people in their lines and are making minimum wage. I don't blame them for being moody.
They have weekly specials as well.
I don't work for Peapod---just an extremely happy customer.
Dan Vitek
2:40 pm on Friday, February 1, 2013
WHY DONT WE JUST TURN THE CITY OVER TO WI-PAC AND BE DONE WITH IT THE CITY FATHERS SOLD OUT A LONG TIME AGO JUST LOOK AT ALL THE SWEET HEART DEALS THAT THEY HAVE RECIEVED AND LETS NOT FOR GET HOW THY TRIED TO KICK THE FARMER OFF HIS PROPERTY . .QUESTION WHY DO THEY ALWAYS GET SWEET HEART DEALS THEY BOUGHT ALL OF THIS LAND IN OAK CREEK AT FIRE SALE PRICES .
WE THE TAX PAYER NEED TO DEMAND FROM THE ELECTED HEADS OF THIS CITY THAT THEY WORK FOR US AND NOT WI-PAC. WHO WANTS TO SELL THE PROPERTY AND MAKE THERE PROFIT AND LAUGH ON THE WAY TO THE BANK
Dan Vitek
2:45 pm on Friday, February 1, 2013
We have a hearing comimg up on the 11 of Feb. at 6:00 pm at the community center be there and let your voice be heard.
Dan Vitek
2:54 pm on Friday, February 1, 2013
There will be a public hearing on the 11 of Feb at the Oak Creek community center attend and speak up and let the fathers know were you stand.
jack ryan
7:51 pm on Friday, February 1, 2013
I shop at Woodmans a lot but do not "enjoy" it. Pick and Save is a nicer experience and cheaper.
Ron mcD
12:01 am on Saturday, February 2, 2013
competition is good for the consumer, Meijer sells many things that Woodman's & Target does not. You should do your homework before you spout off at the mouth.
ES in OC
11:32 am on Saturday, February 2, 2013
I did my homework visiting a Meijer store in McHenry Illinois. Nothing special here. Very pedestrian grocery selection- merchandised very much like Walmart with small variety overall. The General Merchandise was nothing I could not find at Target, Farm and Fleet or Walmart.
Margaret Quinn
6:45 am on Saturday, February 2, 2013
I think it's sad that we have to put in something we already had which may eventually force people out of a job. Very sad. Can't Oak Creek think out of the box instead of the same old thing? Yes it might be a bit different, but not radically. Big plans again. What a joke it turns out to be.
vocal local 1
8:00 am on Saturday, February 2, 2013
Sorry Folks, It's a done deal. Attending the meeting Tuesday is a waste of your time. You'd be better advised to attend Oak Creek Citizen's Action meeting Thursday, 6PM, at the Community Center. Group hasn't had a meeting in nine months. What are Verhalen, et al excited about? Attendance is open to public, Membership drive in process. The group has fouled city plans in the past.
Mark your calendar and ATTEND.
ES in OC
11:27 am on Saturday, February 2, 2013
Does anyone remember Jewel?? I will take my money to Outpost in Bay View.
Margaret Quinn
2:03 pm on Saturday, February 2, 2013
Competition is good for the consumer to a degree. In a smaller community like oak creek many businesses give back to the community. Why would we want to put hardships on these businesses and possibly put some of our own residents out of work? I think we're maxed out on grocery and big box stores. Let's move on.
Dirk
10:05 am on Monday, February 4, 2013
IKEA, Container Store, Macy's, etc. Many other options that would fit better here. Meijer is a great chain, but overkill, as well as more upcoming traffic problems, is definitely a concern. Needs to be discussed. Feb. 11th
vocal local 1
12:10 pm on Monday, February 4, 2013
Dirk, you missed the comment above. IT"S A DONE DEAL. Public opinions are not to be considered. Wis Park/OC needs something, anything for development. What traffic problems? They can lower the speed limit if necessary. Howell Ave. will become another 76th street. Residents should be advised to learn to use the side streets.
OC123
2:03 pm on Tuesday, February 5, 2013
So disappointing although maybe Pick N Save on Howell would clean up its act a bit if another store came in. I am tired of expired food on the shelves, moldy fruit, frowning cashiers complaining loudly, and no one to bag my goods. I dread going to Woodman's because of the crowded conditions w/ many shoppers loading up multiple carts and its overall dumpiness. I often make the trek over to Sendik's just for a pleasant experience. I do think Meijer would kill Farm & Fleet if any business were to go as a result of it being built. For many reasons and OC's future, I really, really hope Meijer does not get built here.
ChrisOC
2:16 pm on Tuesday, February 5, 2013
Check out the website and do some research, people: www.meijer.com
Besides the standard grocery items, luxury name brands featured at Meijer include Carhartt, Caterpillar, Dickies, Hanes, Skecher, etc. and that wonderfully classy Sauder furniture....it does sound a lot like Farm & Fleet. Not very original or "hip" to say the least. Why don't we just put a Dollar Store, an Aldi, and a Checks Cashed there while we're at it?! I'm sure businesses will be fighting over who gets to build next to Meijer..................
vocal local 1
2:48 pm on Tuesday, February 5, 2013
Yea, the Goodwill, Value Village and St. Vincent De Pauls. Maybe Dimity will come back to Oak Creek and open a boutique thrift shop. She reports business is thriving on the south side.
OC Has No Future
3:10 pm on Tuesday, February 5, 2013
I'll be outside the meeting next week handing out flyers letting the rubes know how their city is being destroyed. It will have specific questions you can ask the idiots in charge. Of course you won't get any real answers and it wont change anything, but it'll be fun to watch them squirm when you bring up these things that they thought nobody knew about.... get ready boys.
PatchReader
3:56 pm on Tuesday, February 5, 2013
Let's get some new unique things not in the immediate SE suburbs to draw people in: HuHot, a sporting goods store (Dick's or Sports Authority), bookstore, Michael's, a decent shoe store to replace the poor tiny version of a Famous Footwear that was here, Portillo's, California Pizza Kitchen, or an UNO. OC needs to think about what would be a good addition to the businesses that are already thriving in the city and what kinds of things would add to the community without taking away from current businesses.
Be Logical
4:56 pm on Tuesday, February 5, 2013
The amount of negativity and misinformation in these comments is sadly typical of every other comment section in the Patch, OCNow, and the Milwaukee Journal ...How in the world do you folks get through the day? Conspiracy theories, doom and gloom as the late Mayor Bolender used to say, outright lies, personal attacks on the elected officials that the majority of the residents voted for. How about some positive suggestions, how about going to the meeting with an open mind, why not look at the development as an opportunity to move the city forward, instead of trying to keep it locked down in some sort of 1950's version of what you think it used to be...Sad commentary on our society...
vocal local 1
1:41 am on Wednesday, February 6, 2013
The late Mayor Bolendar, and council didn't allow the residents of OC any voice in their dirty deals with Wis Park, the Delphi Site, the Civic Center, the Peter Cooper Property on the lake front and the property on Howell and Oakwood, now did they? They repealed the Direct Legislation which would have provided residents with voice per referendum. They conducted all business in closed session as does the current mayor and council. They voted against the voice of the residents that spoke against their multi-million debt plan financing to manipulate the sale of valuable OC land and future development to Wis Park. Any misinformation the public shares is directly the result of the elect not the residents who have no control over the lack of governmental transparency. How much money would you suggest the city spend trying to develop per demands of Bolendar contracts on third and fourth class, cheap development with cozy non-profitable agreements with your elect? What is their personal gain for selling the city out? Were in a depression in case no one has informed you. In a depression business's fail go bankrupt as the general public lacks money to purchase. High end stores aren't investing they are holding on development until the economy picks up or we go flat broke they are not wasting resources on new stores that will not yield profits. OC is not the North Shore. This is a blue collar community composed of residents with the finances to shop discounted retail and resale.
curious1
10:01 am on Wednesday, February 6, 2013
Was Meijer already approved by the Plan Commission & Common Council? If so, I missed the opportunity to go to these meetings. The flyer I received in the mail yesterday would indicate to me that this has already been approved. Seems to me that the attitude of the City is 'this is what we are doing & if you don't like it, too bad'.
What ever happened to public input before making these epic decisions?
curious1
3:08 pm on Wednesday, February 6, 2013
Has the Meijer already been approved by the Oak Creek Plan Commission and Common Council? The flyer I received in the mail yesterday seems to imply this is already approved by the City. Seems to be a case of "this is what we are doing & if you don't like it, too bad." I thought the standard procedure for development in this City is that a public hearing must occur BEFORE something gets approved. That is even more critical on a development of this scale & importance.