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Discount groceries gain market share across Oregon - Discounts Finder

Oregon’s economy may be thriving — and according to at least one economist, food costs less today than it did 30 years ago — but there’s a ready market for the increasing number of discount grocers in the state.

Clearly, not everyone is doing their grocery shopping at pricey Whole Foods. Or even at Safeway, with its newly gussied-up “lifestyle” format. Many are heading instead to discounters such as WinCo Foods, Grocery Outlet and Price Less Foods, where the focus is on low price, not high style.

Grocery retailing once was dominated by supermarket chains so similar that shoppers moved freely between, say, Albertsons and Safeway. But now, “There’s a long list of new entries doing it differently than the traditional grocery,” says Bert Hambleton, president of the Seattle-area grocery-consulting firm Hambleton Resources.

“It’s all about moving away from the center,” he says. Whether it’s upscale stores such as Whole Foods and New Seasons, or discounters, “every one of the segments that moves away from the middle of the conventional grocery spectrum is growing.”

As a sign of the growing discount market, Save-A-Lot entered the state this year, opening its first two stores in the Portland area; it recently announced a third store will open in Springfield, and it  plans to steadily increase its Oregon presence.

“These are big populations underserved by existing retail,” says Steve Burkhardt, vice president of strategic planning for the Earth City, Mo., chain, which now operates in 42 states, explaining its expansion into the Pacific Northwest. “We’re looking for new markets.” The chain now has more than 1,160 stores nationwide and annual sales of more than $4 billion.

Another growth spurt has come from Grocery Outlet, headquartered in Berkeley, Calif., which this year opened three new Oregon stores in Albany, Prineville and Woodburn. That makes a total of 28 Oregon stores, more than any discount grocery chain in the state, and the privately held company still is looking for more locations.

“We’re actively in the market all the time,” says Jon Wylie, vice president of marketing for Grocery Outlet, adding “Oregon and Washington have been great states for us.” The company has 124 stores in six Western states and one in Hawaii, with total yearly revenues of $600 million. Stores average about 20,000 square feet and annual per-store sales average about $5 million.

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