Save-A-Lot Looking to Double In Size, Again

Discussion
Jun 28, 2004
George Anderson

By George Anderson


Bill Moran’s bosses at the wholesale grocery company he worked for didn’t go for the Save-A-Lot limited assortment grocery store concept he brought them nearly 30 years ago,
so he opened three stores anyway.


Today, Mr. Moran and the chain he founded and still runs as chief executive (Supervalu purchased Save-A-Lot) is growing exponentially, while many others in the grocery business
are treading water or worse.


Most of those having difficulty point to the economy or the Wal-Mart phenomenon
as the reason behind their troubles, but Mr. Moran has no such problem.


He told the St. Petersburg Times, “It’s interesting. Our sales have grown at virtually the same pace regardless of the economy. We don’t sell the selection others do,
so most of our customers shop the other stores as well and cherry pick the best deals from us. But we’ve been able to peacefully co-exist with Wal-Mart. We have doubled in size
since 1996. We plan to double in size again in the next few years.”


Mr. Moran is not looking for business to slacken, in part, because he sees a growing number of people being squeezed financially.


Save-A-Lot’s customers are mostly “people on a fixed or limited income,” he said. “The average customer comes from a household with income of $35,000 a year or less. But today
that includes 42 percent of the population and it’s forecast to keep growing at a rate of 2 percent a year.”


He did say that the more affluent are also discovering Save-A-Lot. “You’ll see Mercedes in our parking lots too. Some of our best-performing stores are in Naples and Marco Island.
We weren’t sure about how we would do in Sun City Center, but it’s been great. People drive their golf carts right up to the door.”


Moderator’s Comment: What lessons, if any, are there for traditional grocery stores to learn from limited assortment
operators such as Save-A-Lot?


Current wisdom says, to differentiate from Wal-Mart, you have to be the un-Wal-Mart offering services and products its Supercenters don’t, such as fresh
meat departments with butchers.


But, here Save-A-Lot makes its business selling only items in boxes, bags, bottles and cans while achieving growth even Wal-Mart would be giddy to achieve.
Save-A-Lot is also making its sales to many of the same price-conscious consumers considered to be Wal-Mart loyalists. What gives?

George Anderson – Moderator

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