(Aldi's Edmond location on West Edmond Road)
The winds of change are blowing into the Oklahoma City grocery market in the form of discount retailers Winco, Aldi and Save A Lot. Winco is a major warehouse-type grocer new to Oklahoma with a 90,000 sq ft footprint. They have identified four locations in the Oklahoma City metro area and are under construction with three of those stores now. Aldi and Save-A-Lot are both small neighborhood deep-discounters with a limited assortment of items targeting thrifty shoppers, and both are adding locations to their store count.
The cumulative effect of adding 400,000 sq ft square feet onto the Oklahoma City grocery scene (in addition to nearly 800,000 square feet added by Wal-Mart in the last three years) is the closing of a number of Buy for Less and Homeland stores. In addition to closing units, both Buy for Less and Homeland have re-branded some stores to a cost-plus format to better compete.
The counter-balance to the entrance of discount grocers and the closing of more mid-line grocery choices is the expansion of specialty grocers Natural Grocers and Sprouts. Both are operating in smaller footprints than traditional grocers, yet are targeting the shopper seeking fresh and ready-made/take-out items.
With Wal-Mart controlling the predominant percentage of the grocery sales in the metro area, it only stands to reason that they will absorb a hit in their sales as well. But Wal-Mart’s size, marketing savvy and aggressive competitive nature should serve it well in this environment. Homeland and Buy for Less are bracing for the competition and repositioning their stores for the fight for market share just as their recent store closures suggest.