The Dallas Morning News reports that grocers in the Dallas-Fort Worth market are preparing to bring their A-game as H-E-B starts opening stores bearing its eponymous banner there later this year - with the likely result being that "Dallas-Fort Worth grocery shopping is going to be the best it’s ever been in 2022 … The race for more than $24 billion in annual grocery spending is intensifying, and experts say the winner will be the consumer."
For example, the Morning News writes, "After a multiyear pause in construction, some major grocers say they’re ready to start building stores again.
"Kroger is planning a new store in Melissa and said it will replace one of its Plano stores when a new one is built.
"Whole Foods Market will anchor the retail section of a 50-acre mixed-use apartment and office project called West Grove at the southeast corner of Custer Road and U.S. Highway 380 in McKinney.
"Target, which has been busy remodeling its local stores but hasn’t opened a new one in the market since 2018, is building a 140,000-square-foot store on U.S. Highway 380 and Preston Road in Prosper … Trader Joe’s is looking for new sites again.
"Sprouts Farmers Market, which just opened stores in Grand Prairie and Las Colinas, will open in September in East Dallas’ Hillside Village in a space that had been a Stein Mart.
"Albertsons is opening in south Irving after a 15-year absence when it completes an extensive remodel of a former Fiesta Mart."
Plus, the story says, "Walmart is planning 115 remodels in Texas this year — 50 of them in D-FW — including one in Forney that’s underway. It’s just across U.S. Highway 80 from land purchased by H-E-B. Walmart is planning to call attention to some of its local remodels with reopening events."
According to the piece, at the moment Walmart & Sam's Club combine for a market-leading 35 percent share of the area's grocery business, followed by Kroger at 16.3 percent, and then Albertsons (which also owns Tom Thumb and Market Street) at 11.7 percent. Target has an 8.2 percent market share.
- KC's View:
Funny … on Friday the story was about how H-E-B has grown market share in San Antonio, but now will face a new pure-play competitor as Kroger brings its e-grocery service to town. And now the story is about how H-E-B is bringing its eponymous stores to a market where Kroger already has a physical presence.
My guess is that in the short-term, H-E-B will be able to disrupt the Dallas market more than Kroger will be able to move the needle in San Antonio, where I continue to believe it will hurt smaller plays than H-E-B.
But Kroger's play in San Antonio is one with long-term implications, if it works. But they're going to have to be patient, and not worry too much about ROI for a couple of years.