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Brand-new bagsCustomers drive size, features at Central Pa. grocery stores

By , - Last modified: June 29, 2012 at 9:52 AM
At York's Giant supermarket on East Market Street, this sushi bar is new. Much of the store has been remodeled for a more cosmopolitan appearance and to suit shoppers' tastes. Photo/Bil Bowden
At York's Giant supermarket on East Market Street, this sushi bar is new. Much of the store has been remodeled for a more cosmopolitan appearance and to suit shoppers' tastes. Photo/Bil Bowden

Visit a midstate supermarket built in the past few years and the experience is likely to be overwhelming.
Aisle upon aisle of products, from apples to Zippo lighters. International sections with Mexican, Chinese, Indian and Thai products. Organic sections overflowing with tofu, quinoa and gluten-free pizza. Beer gardens, cafés and buffets. Community rooms and children's play areas.

"Our customers, frankly, are just demanding more from us," said Chris Brand, public and community relations manager for Giant Food Stores, based in Middlesex Township, near Carlisle.

"We operate in an intensely competitive business and, as a result, are focused on continuous improvement," said Dennis Curtin, spokesman for Weis Markets Inc., based in Sunbury, Northumberland County. "A remodeled or expanded store allows us to offer our customers more of what they're looking for."

For a decade or more, spurred by intense competition, the trend in U.S. supermarkets has been toward bigger and bigger stores, some carrying 60,000 items or more.

Between 1995 and 2005, median store size grew nearly 30 percent, from 37,200 square feet to 48,058 square feet, according to the Arlington, Va.-based Food Marketing Institute, though the trend has since reversed slightly. Median size stood at 46,000 square feet in 2010, the most recent year available.

Giant's Linglestown Road store north of Harrisburg, the chain's largest, is roughly 100,000 square feet.

Besides the typical amenities such as a bakery and deli, the store features a full-service pharmacy, a floral shop and a café with seating for more than 60. The store's staff includes a party planner, pharmacists and a nutritionist.

A gas station in the parking lot offers discounts for Giant Bonus Card customers. Remodeling is beginning for a beer garden like the one Giant opened this month at its Springettsbury Township store in York County, Brand said.

Giant has similar 90,000- to 100,000-square-foot stores serving the Camp Hill and Willow Grove markets, Brand said. Overall, Giant's stores average 65,000 to 70,000 square feet.

The midstate's largest supermarket is the Wegmans on Carlisle Pike in Silver Spring Township, which tops out at more than 130,000 square feet. Based in Rochester, N.Y., Wegmans has 15 Pennsylvania stores.

Sales of groceries in the U.S. exceeded $1 trillion in 2009, a little more than half coming from supermarkets, according to a 2011 report by The Reinvestment Fund.

Supermarkets face intense competition not only from each other, but also from dollar stores, convenience stores and big-box stores such as Walmart. All that competition keeps profits low — typically about 2.5 percent overall, said Phil Lempert, a California-based industry expert who bills himself as "the Supermarket Guru."

That same competitive pressure is what's driving the focus on amenities, the report said.

"A vast majority of stores now offer prepared foods for takeout and have floral departments. … Supermarkets are also increasingly offering ethnic foods and organic and natural foods," the report said.

Not every store can be gargantuan, but staying up to date is vital, as are targeted store expansions when local conditions warrant. Giant has 20 projects "in the pipeline" for 2012 and prides itself on having one of the lowest averages in the industry for the ages of its properties, Brand said.

Giant's real estate team is constantly analyzing sales, foot traffic and neighborhood demographics, data that drive store investment decisions, Brand said.

When Giant remodeled its Union Deposit store, a project completed last year, it added 11,000 square feet.

"We'll often evaluate if a store is the right size for its market," he said. "We felt that neighborhood could support that."

Weis Markets is investing $125 million in its capital expansion this year, up from $100 million in 2011, Curtin said.

"Over the past three years, we've completed 70 projects, and by the end of this year this number will increase to over 100, out of 159 units," he said in an email.

Remodeling also offers cost savings when companies take advantage of remodeling to install energy-efficient lighting, freezers and other equipment, Curtin and Brand said.

The ultimate goal, Brand said, is creating an environment that meets customers' needs.

"It's driven by our customers," he said.

In the mix: smaller stores

Nationally, it appears the push toward bigger stores might be reversing to some extent.

"As the baby boomers age, navigating large stores is becoming more physically taxing for them," says Phil Lempert, the California-based "Supermarket Guru" industry analyst.

"Moreover," he says, "busy people don't want to comb through vast selections if they only need a dozen eggs and a quart of milk."

Recognizing this, Wal-Mart and other chains are introducing scaled-down "express" stores, and consumers are responding favorably, he said.

"We're seeing stores that are 15,000 to 20,000 square feet," he said.

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