Once the only game in town, Stop & Shop’s dominance is under siege. CT is ‘hyper competitive market’

Stop & Shop supermarkets — the grocer where three generations of Connecticut shoppers filled their carts — remains the most popular place to pick up produce, meat and dairy in the state, but that dominance is under siege.

Quincy, Mass-based Stop & Shop’s recent announcement that it will shutter as of now an undisclosed number of “underperforming” stores — some likely in Connecticut where it operates nearly 90 outlets and is working to grow its online business — comes as it faces intensifying competition on all fronts and at a time of price inflation.

Low-price grocery juggernauts such as Walmart Supercenters and Aldi have expanded rapidly in Connecticut in the last decade. Those competitors are forcing Stop & Shop to examine its pricing, which some experts say is as much as 14% higher.

On the other end, pushes by upscale grocers such as Whole Foods and Trader Joe’s are putting pressure on Stop & Shop to up its game on quality. Experts say Stop & Shop took a hit when it began phasing out in-store butchers in favor of pre-packaged meat.

“You’ve got a hyper competitive market in our little state,” said Wayne Pesce, president of the Connecticut Food Association, a state trade organization. “All these plates are shifting and Stop & Stop who’s got the most to protect, right?”

Pesce, whose trade group promotes food retailing in Connecticut, said there is no letup in sight.

Norwalk-based boutique grocer Stew Leonard’s has firmly established its brand in Newington and is now setting its sights on New Haven County. Wegman’s of New York, with outlets throughout the Northeast, is now building its first store in Norwalk that is expected to open next year.

All the jockeying by grocers in Connecticut is likely to have an upside for consumers in both price and food quality, Pesce said.

“You have competitors investing in the market,” Pesce said. “That is happening, and that is good for consumers.”

‘That’s not enough’

Stop & Shop was founded in Massachusetts more than a century ago, opening its first Connecticut store in 1941. Today, Stop & Shop now has nearly 400 stores in five states. Along with other U.S. grocers such as Food Lion and Hannaford, Stop & Shop is owned by Dutch retail and wholesale giant Ahold Delhaize.

JJ Fleeman, chief executive of Ahold Delhaize’s U.S. operations, told investors last month that Stop & Shop has made significant strides in enhancing loyalty programs, which extend rewards, discounts, or other special incentives to keep customers coming back to shop. In addition, steps have been taken to build its digital customer base.

“But that’s not enough, and it’s not where we want or need to be,” Fleeman said, according to a video of the investor meeting. “As Stop & Shop embarks on its next phase, we will be decisive and take deliberate and appropriate actions to ensure a stable future for the brand.”

In addition to pricing and a “focus on quality, fresh products and well-stocked shelves,” Fleeman said there will be an emphasis “on fantastic service in each of its stores.”

While Stop & Shop has invested in remodeling 190 stores, it will make “difficult decisions” to close locations so the grocer can “create a healthy store base for the long term and grow the brand.”

In a separate statement, Stop & Shop said Connecticut remains a priority for the grocer, and it plans to continue investing in store upgrades in the state.

The initiatives come at a critical time for Stop & Shop, at least in Connecticut, where the grocer has been a familiar anchor at shopping centers for 40 years.

In 2003, Stop & Shop had a market share of 40.4% in the Hartford area, according to New York-based Strategic Resource Group, a retail industry consultant. That market share had eroded to 26.8% as of 2023.

Over the same period, Walmart Supercenters, which offer full-service grocery, went from virtually no market share in 2003 in the Hartford area to 12.9% last year. Across Connecticut, 26 Walmart Supercenters opened in that time period, Strategic Resource Group said.

ShopRite, another low-cost competitor, said it has opened two new Connecticut stores in Cromwell and Vernon and has remodeled seven stores in the last five years. This week, two remodeled stores in Stamford will mark grand re-openings.

ShopRite stores and its sister grocer Price Rite are part of a cooperative in which independent family-run businesses operate stores. All together, the cooperative, Keasby, N.J.-based Wakefern added 27 stores in Connecticut since 2003, boosting its market share in the Hartford area from 2.7% to 11.1%

Emails seeking comment from Walmart, Big Y, Costco, BJ’s Wholesale Club and Aldi weren’t returned.

David Cadden, a professor emeritus of entrepreneurship and strategy at Quinnipiac University in Hamden, said there has been a dramatic shift in how consumers buy their groceries, at least on the cost-saving end of the shopping spectrum.

“The key thing is people are much more willing to become less brand loyal to particular retail outlets and begin to take a look for the best bargain and the best value that they can find at different locations,” Cadden said.

The option of calling in orders can “minimize the annoyance of going to different locations,” Cadden said.

‘Get back to business basics’

Stop & Shop long had a reputation for investing in quality and service, some experts say, but that has shifted in recent years. Perhaps the most notable example is the decision to move to pre-packaged meats, phasing out meat cut to order in the store.

The purchase of meat, particularly in the U.S., is central to weekly shopping trips, not only to consumers but grocery stores.

“Meat is the keystone in the bridge of the shopping basket to get the average customer instead of spending $35 to $40 per average transaction to spend $75 to $95,” Burt Flickinger, managing director of Strategic Resource Group, said. “And in many cases, numbers far exceed $100 per transaction.”

Stop & Shop didn’t appear to see that coming, Flickinger said.

“That shifted the customers over to Big Y, some of the ShopRites, but the lion’s share of the customers went fleeing to Costco,” Flickinger said.

Flickinger said centralizing some meat packaging is all right, but there still has to be the service at the store, the master meat cutter or butcher.

“It seems like they should get back to business basics and fresh foods, starting with meat and produce,” Flickinger said. “And to prices that are more competitive.”

Step forward, step back

Experts warn that cost-cutting through store closings like what Stop & Shop is pursuing can touch off a retailer’s downward spiral, with closings leading to more.

But in Hartford, the prospect of a potential shuttering is raising other concerns. The Stop & Shop on New Park Avenue in the city’s Parkville neighborhood is the sole full-service supermarket in Hartford.

Martha Page, chair of the Hartford Advisory Commission on Food Policy, said the loss of the Stop & Shop would be a critical setback to increasing access to healthful food in a city that long struggled with food insecurity.

“You go a step forward and then a step back,” Page said. “There’s no question about it, if that store closes, that leaves a hole. That not only leaves a gap in the food landscape but it leaves a challenging site, real estate wise.”

The city has long pushed for more food shopping alternatives in Hartford if it is to continue on its redevelopment trajectory. One such effort that is on-going is to bring a grocery store to the city’s North End neighborhoods.

Jennifer Barr Brogan, a Stop & Shop spokeswoman, said the supermarket chain couldn’t provide specific store locations that may be shuttered or a timeline. It is too early in the process, Brogan said, in an email.

“Stop & Shop can confirm that the broader community impact of a store closure will be considered,” Brogan said.

Here is a look at the major Connecticut grocers and how the food retailing landscape is shifting:

 1. Stop & Shop

Founded: 1914
Headquarters: Quincy, Mass.
No. of CT stores in ’23: 81
Change from ’03: +12
Hartford area market share in ’23: 26.8%
Hartford market share in ’03: 40.4%

2. Walmart Supercenter

Founded: 1962*
Headquarters: Bentonville, Ariz.
No. of CT stores in ’23: 28
Change from a decade ago: +26
Hartford market share in ’23: 12.9%
Hartford market share in ’03: n/a

*first U.S. supercenter opens in 1988

3. ShopRite/Price Rite

Founded: 1946
Headquarters: Keasbey, N.J.
No. of CT stores in ’23: 39
Change from ’03: +27
Hartford area market share in ’23: 11.1%
Hartford area market share in ’03: 2.7%

4. Big Y

Founded: 1936
Headquarters: Springfield
No. of CT stores in ’23: 37
Change from ’03: +21
Hartford area market share in ’23: 9.4%
Hartford area market share in ’03: 11%

5. Costco

Founded: 1983
Headquarters: Issaquah, Wash.
No. of CT stores in ’23: 9
Change from ’03: +5
Hartford area market share in ’23: 8.5%
Hartford area market share in ’03: 3%

6.  BJ’s Wholesale Club

Founded: 1984
Headquarters: Westborough, Mass.
No. of CT stores in ’23: 11
Change from ’03: +6
Hartford area market share in ’23: 4.4%
Hartford area market share in ’03: 1.2%

7. Aldi

Founded: 1961
Headquarters: Essen, Germany
U.S. headquarters: Batavia, IL
No. of CT stores in ’23: 26
Change from ’03: +24
Hartford area market share in ’23: 2%
Hartford area market share in ’03: n/a

SOURCES: Strategic Resource Group, Company websites

Kenneth R. Gosselin can be reached at kgosselin@courant.com.