Grocery between high and low ends

Positioned: The Safeway opening today in Hanover is part of a design concept aimed at appealing to a market that lies between those of high-end stores and discount chains.

April 07, 2004|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

At a Safeway supermarket that opens today near Arundel Mills mall in Hanover, the strawberries take center stage.

As part of a design concept the grocer is unveiling, the lights are low in the produce section and spotlights are aimed at the displays of fruit.

"The produce is the star, so it is being highlighted," said Greg TenEyck, director of public affairs for Safeway's eastern division, based in Lanham.

Last week, Safeway Inc. and Giant Food Inc. settled with their unionized workers on a new contract to avoid a strike like the long one that disrupted the grocery industry in Southern California recently. Today, Safeway unveils something it's happier to bring east from California: a fancier prototype store aimed at fending off competitors at both ends.

Under the new concept, traditional supermarket design features as bright lights and linoleum floors are exchanged for a warmer, more relaxing environment, Safeway officials said.

Traditional grocery chains are facing increased competition in the food business from sources such as gas station mini-marts and discount stores such as Target Corp.and Wal-Mart Stores Inc.

The competition is expected to intensify as Wegmans Food Markets Inc., which specializes in outsized gourmet supermarkets with about 120,000 square feet, increases its presence in the region.

Wegmans opened a store in Sterling, Va., near Washington, last month. The Rochester, N.Y., company is building one in Hunt Valley and is seeking zoning approval for another in Columbia.

"Everybody who sells a chicken or turkey is taking a piece of the pie," said Mark Millman of executive search firm Millman Search Group in Owings Mills. "Not everybody can survive. Some will disappear as the competition increases and the margins become razor-thin."

California-based Safeway, which has 77 Maryland stores, doesn't expect to compete head-to-head with Wal-Mart or Wegmans. Rather, it hopes to strengthen its standing among grocers that fall between discount stores and high-end supermarkets

The new prototype at the 57,860-square-foot Hanover store is one Safeway has tried at stores in the West Coast with much success. The chain is also remodeling two stores in Columbia with the new concept.

"Everybody has gotten into the grocery business, and our competition has broadened," said TenEyck, the Safeway spokesman. "So we need to differentiate ourselves."

The new Safeway uses some of the concepts of a gourmet grocery store. The food items in the deli and bakery are stacked on shelves made of mahogany. And the floors in the produce and natural food sections are made of hardwood, not linoleum.

There is a bar with a variety of olives, artichoke hearts and roasted peppers, and a gourmet cheese bar with 40 varieties.

The floral area is essentially its own shop within the supermarket, with its own register so shoppers don't have to stand in line behind people with carts of groceries. Lined along the wall are displays of candles, vases and watering cans that look like those found at an upscale home store.

A specialty-meats aisle offers prepared meats for families on the go who still want a fancy dinner. Among the offerings are an Italian pork roll with spring onions and teriyaki sauce, and a beef roll with Swiss cheese spinach and goat cheese, ready to be cooked in the oven.

The new store also has an extensive section of pre-cooked foods and a sandwich shop with an area where people can sit down and eat.

Millman, the analyst, said it's a good time for Safeway to try to set itself apart. Its primary competition and the other dominant grocer in the region, Landover-based Giant, is reorganizing. Its Dutch parent, Royal Ahold NV, faces financial difficulties from an accounting scandal and said this year that it will move Giant's corporate headquarters to Massachusetts.

"This is an opportunity for others to come in and take some market share," Millman said.

What's at the new Safeway

Gouda in aisle 7

What's at the new Safeway:

Dim lighting

Olive bar

Sandwich-making station

Sit-down eating space

Gourmet cheese section

Expanded floral shop

Expanded natural foods section

Hardwood floors

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