Monday, July 16, 2007

Super-grocers are punishing convenience stores

Here in the northeast US, super-grocers like Wegmans are providing stiff competition to Wal-Mart in the grocery business, with more abundant produce, more ready-to-eat options and more attractive stores. But they are inflicting pain on convenience stores as well.

Consider my dad's recent visit from Connecticut. He reads the New York Post every day. You won't find the Post everyplace around Harrisburg, but you will find it in several local convenience stores. And at the enormous Giant grocery in Camp Hill.

I took him Friday morning to get the paper. I considered the Sunoco mini-mart, but decided on the Giant. My dad picked up the Post and a couple of scratch tickets. I got milk, orange juice and bread—-all things I could have gotten at the Sunoco. All told, the Giant siphoned $15 from the mini-mart. Not a big ticket for the Giant, but it is for the mini-mart. It made me think about the strategy that Giant is using. Why else would they stock the New York Post and offer easy lottery options if not to draw business away from the convenience stores? And, for me, at least, it's working.

Oh, yeah, our Giant is opening a gas station across the street from its main store. And when you spend $100 at the grocery, you get 10 cents a gallon off gas. Pretty soon the Sunoco will lose my gas business as well.

(Photo: "gas 5" by tome213 via stock.xchng)