Reimagining supermarkets

In my almost 70-year lifespan I have experienced major changes in where we bought our groceries. I grew up in the Fifties in a little town with a single grocery store and a corner store. The grocery store had about four aisles with no meat or fresh produce—all processed food. There was a separate meat market down the street. We grew our own fresh fruits and vegetables. The corner store was where we rode our bikes to buy Chiclets, Orange Crush and other junk food with our modest savings. When I was in seventh grade we moved to a bigger town with bigger stores but not a real supermarket. By the time I graduated from high school the grocery stores had morphed into supermarkets. Later, after completing military service and my graduate studies, Walmart stores started to add groceries to their product lines. Decades later I entered my first Whole Foods Market and Trader Joe’s. I was particularly impressed with the advanced, technology-driven products gracing the center aisles that were neither whole nor real foods as many pundits would classify them. What a triumph of food science to produce these technological wonders!

Whole Foods too

Recently Amazon shocked food retail when it bought out Whole Foods Market. It was Whole Foods that provided the push behind clean labels. In the guise of producing healthier foods, clean labels provide less transparency as these labels allow the manufacturer to pretend that such foods do not contain chemicals. The future of Whole Foods now raises many questions. Will it remain the paragon as capitalism as portrayed by its founder in Conspicuous Capitalism, the overpriced pretender as described in Omnivore’s Dilemma, or somewhere in between? Will it remain a haven for elitist foodies or will it reduce prices to the point that it brings healthy foods to the masses? Will Amazon be able to cut prices dramatically without relaxing Whole Foods standards?


On the other end of the spectrum are the discount chains such as Aldi, Costco, Target and Walmart. Shopping at these outlets are consumers that are more interested in low prices than fancy foods. Even at this level the supermarket power structure can force suppliers to lower their prices, clean up labels, and increase organic offerings. Such stores are leading the a healthy snack revolution, although healthy and snacking may be mutually exclusive terms.

What then happens to currently dominant supermarket chains that could end up being caught in the middle? Will they remain dominant or will they be squeezed between the specialty stores like Whole Foods Market on one side and the discount giants like Walmart on the other? Chains such as A&P, Dominick’s, Fresh and Easy, and Finast no longer exist. Others such as Albertsons and Winn Dixie have closed many of their stores. When a supermarket chain closes stores, some of them may be bought and reopened by a competitor while other stores may remain closed. In many areas of business, the large mass-market and the small specialty chains are able to survive. Those businesses in the middle must either carve out a special niche, grow, or die. It is unclear how changes in the regulatory climate under the current US administration will affect supermarket chains and power. Supermarkets are not just places where groceries and assorted items are for sale. Frequently they anchor shopping centers that provide other services. When a supermarket fails and is not replaced, the adjacent stores suffer and community cohesion can be lost.

Shopping center blues

If the supermarket closes permenantly, what hppens to the other businesses and the community?

Another reason that supermarkets are important is that they are the key component in limiting food deserts. Food deserts are described as “areas that lack access to affordable fruits, vegetables, whole grains, low-fat milk and other foods that make up a full and healthy diet.” Food deserts generally lack access to supermarkets, large grocery stores or farmers markets with its residents dependent on corner or convenience stores for their food. Thus, people living in food deserts have limited transportation options and fewer food choices. Corner stores and gas stations do not provide the choices found at supermarkets and grocery stores, although regulations governing these operations require stocking of certain items if they accept food stamps. When a major chain folds, stores affected in more affluent areas are more likely to be purchased and reopened than those stores in less affluent neighborhoods.

It is not clear whether two other trends—online grocery operations and meal kits—will become major players in food distribution. The main problem is not with shelf-stable processed foods but with perishable items. Webvan, an early home-delivery service, started and failed almost two decades ago when the internet was not as sophisticated as it is now. Instacart and Postmates use personal shoppers to pick up and deliver foods and other items from selected stores in the area. Alternative options also include ordering online from a supermarket and picking it up on the way home to same-day or two-day delivery.  Amazon and Walmart are looking at programs featuring in-home delivery where a courier could unlock the front door and even place perishable items in the refrigerator. As I listen to my XM radio, I hear wonderful advertisements for meal kits such as Hello Fresh and Blue Apron. At the suggestion of one of my followers, I plan on ordering from a meal-kit service for 2-4 meals a month and reporting on my experience on this site next year. I will be interested in the quality, convenience, safety, and nutritional information I am able to obtain on each of these meals.

Changes in the structure of supermarket ownership will inevitably affect the structure of supply chains. Supermarket buyers are powerbrokers within the supply chains. They have the power to affect which products are available to the consumer. With this power they can reward suppliers who can cut the costs within the chains, or they can demand improved sustainability of the goods. Supermarket buyers can also make an impact on the labor conditions of workers from field to market. The viability of local and regional supply chains will also be tested. Local and regional produce is great for marketing if they can be supplied in sufficient quantities with consistent quality over a significant length of time. Nothing frustrates individual stores more, however, than to run out of a weekly special or have it fail to live up to expectations. The big companies are likely to get bigger and may push the limits of growth.

I have no crystal ball, but it doesn’t take a mental giant to foresee many more changes in supermarkets in the coming years. Many questions emerge such as

  • Will specialty stores like Whole Foods continue to carve out a special niche or will they transition to a more mass-market culture?
  • Will the discount stores continue to emphasize low prices or will they start to offer more niche products at higher prices?
  • Will the mass-market supermarket chains be able to survive in a polarized marketplace or will they need to gravitate to either more niche markets, greater discounting, or attempt to be all things to all customers?

It is clear that the supermarkets will continue to wield power over the choices of food we will have available to us. It is not clear how this power will affect consumers who have been marginalized by the current situation and if others will be marginalized in the future. Online shopping and meal kits are here to stay, but whether they will increase to the point that they make a major impact on the number of brick-and-mortar stores remains to be seen.

For those of you looking for a replay of my interview on the Matt Townsend show on BYU radio go to this site and click on the second story, In Defense of Processed Food.  Thanks for all of the encouraging comments.

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