You Gotta Eat
Even in a slow economy
Today’s economic realities are complicating the lives of consumers, who for the better part of a year have been honing their shopping skills in an effort to buy more with less. But through it all, one thing doesn’t change: People have to eat. It is a fact that benefits grocers.
In a fall 2008 survey of how consumers were spending the “savings” many enjoyed as a result of falling gasoline prices, groceries were named most often as the category that gobbled the extra bucks. Consumers put trips to the grocery store ahead of putting money into savings, paying off credit cards or spending on entertainment, according to the nationwide survey by retail analytics firm Precima.
The economy’s sharp downturn has families retreating to their “nests,” analysts say. People are spending more time at home and finding low-cost ways to entertain themselves. In this environment, the idea of gathering around a table at mealtimes is making a comeback.
“Clearly, this is a silver lining for grocers in the economic dark cloud,” Precima General Manager Brian Ross said in a statement about his survey.
In the New Orleans area, recent employment reports suggest that the economic “cloud” may not be as dark as it is in other parts of the country. Nevertheless, local grocers have noticed that food is moving off the shelves a little faster.
Marc Robért, owner of Robért’s Fresh Market stores, agrees that people are spending more time around their own dinner tables. “When you cut back on spending, you don’t go out to eat in restaurants as much,” he says. “I’ve always felt that in rough economic times, groceries do better.”
Robért, whose business was hurt badly by Hurricane Katrina, continued operating a single store, on West Esplanade Avenue in Metairie, for a couple of years while he worked to get the doors open at others. In 2007, he finally reopened a vastly renovated 30,000-square-foot supermarket on Robert E. Lee Boulevard in Lakeview. Last year he debuted a new, smaller store at Carrollton and Claiborne avenues in the Carrollton area.
Sales at both stores are running ahead of pre-opening projections, Robért says. In fact, sales at the Lakeview store have surpassed pre-Katrina numbers.
An ongoing legal dispute with his landlord has kept Robért from reopening another damaged store, on St. Claude Avenue, but he hopes to resolve that issue soon. Meanwhile, he’s pressing ahead with a second store in Lakeview.
The site, on Harrison Avenue in the heart of Lakeview, formerly housed the popular Lakeview Fine Foods, whose owner decided not reopen the grocery after Katrina. Robért signed a lease last fall for a 22,000-square-foot store that he hopes to open this summer.
While he hasn’t settled on the store’s moniker, he says the new grocery won’t carry the name Robért or Fresh Market. In contrast to his Robert E. Lee Boulevard store’s emphasis on specialty foods, higher-end groceries and deli items, the new Lakeview store will focus more on house and national brands and “value propositions,” which research indicates the consumers in that area want.
As Robért targets the recovering Lakeview area, other locally based grocers are continuing to build their bases. In 2007, Thibodaux-based Rouse Enterprises took a huge leap with its acquisition of 20 Sav-A-Center and A&P stores in Louisiana and Mississippi.
Through the acquisition, Rouses went from operating four local groceries to owning 19 metropolitan area stores. Today, Rouse brothers Donald and Tommy hold almost 16 percent of the greater New Orleans grocery market, according to figures from food service research company Shelby Publishing of Gainesville, Ga. That is in addition to 16 stores the brothers own in neighboring communities and Mississippi.
The Rouse brand began life in 1923 as City Produce Company, founded in Thibodaux by J.P. Rouse. His son, Anthony, who died recently at age 79, transformed the produce business into a grocery store. Later, Anthony’s sons Donald and Tommy expanded the operation across southeastern Louisiana.
The brothers opened their first metropolitan area store, in Metairie, 14 years ago. Rouses Supermarkets since have become the third largest seller of groceries in the New Orleans area, based on Shelby’s numbers. The family is the first regional grocer to claim that kind of market share since the demise of Schwegmann Brothers Giant Super Markets, which fell into decline and was sold in the 1990s.
Scott Miller, who now runs the grocery business for the Rouses, says the process of integrating all the new stores under one umbrella has gone well. “We’ve been very pleased with the results so far,” he says.
Miller says the company’s history in rural Louisiana helped prepare it for the current challenge. “Prior to the acquisition, Walmart was our only competitor in our core markets, so we were forced to be competitive on price to remain in business. We feel we bring that strength to the New Orleans market,” he says.
Yet another family grocery that’s continuing to build on its name is Breaux Mart, with five area supermarkets. Owner Barry Breaux, who already had stores in Metairie, Gretna, River Ridge and Chalmette, solidified his brand’s New Orleans presence a few years ago by taking over an A&P store on Magazine Street.
Today, these and other locally owned groceries continue to duke it out with the perennial “big guys” who dominate the business around the country. Giant discounter Walmart continues to hold sway as a grocery powerhouse throughout the region and the nation. Shelby Publishing reports that Walmart controls 37 percent of the local grocery market, followed by Jacksonville, Fla.-based Winn-Dixie.
Who’s selling the most groceries in greater New Orleans:
Retailer percentage of market
Rouse Enterprises 15.8
Breaux Mart 2.7
Whole Foods 1.8
(including Robért’s Fresh Market) 16.5
Source: Shelby Publishing Co., based on data
provided by Trade Dimensions