Shoppers may have more options for where they buy their eggs and butter these days, but two grocers dominate Southwestern Pennsylvania by far.
Walmart and Giant Eagle together took nearly half of the grocery dollars in the region last year.
Despite O’Hara-based Giant Eagle being the hometown grocer, Walmart has been grabbing a larger share of consumers’ budgets, according to data from Chain Store Guide, an industry analytics firm.
The third largest share of the local market is Sam’s Club, Walmart’s membership-based warehouse chain, at nearly 10% of the market. Other competitors, such as Trader Joe’s, Whole Foods and Aldi, haven’t cracked double digits, according to the data.
While Arkansas-based Walmart leapt over Giant Eagle to capture 25.64% of the regional market compared to 21.40% in 2021, it could have been in the lead previously. Chain Store Guide only calculated Walmart Supercenters in its formula, but in its 2022 data, the firm began to include regular Walmart stores along with Supercenters.
Giant Eagle’s market share came in at a little more than 21% in 2022.
Overall, the grocery sector is growing, in no small part because of the pandemic that forced more people to cook at home.
“The sector benefited quite a bit from the pandemic as consumers sheltered at home,” said Chedly Louis, vice president, senior credit officer corporate finance group at Moody’s Investors Service.
Total grocery sales in the region — which includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties — reached $6.98 billion in 2022. That’s up from $5.8 billion in 2021, according to Chain Store Guide.
Even as inflation pushed up the cost of food, people still are buying the ingredients to cook at home rather than dining out.
“It’s expensive to eat at a restaurant,” Louis said. “That’s a continued benefit for the supermarket industry.”
More shoppers are stretching their dollar by trading down to less expensive private label brands. For retailers such as Walmart and Giant Eagle and others that have their own labels, that bolsters their bottom line, Louis noted.
Shoppers like Rose Bienkowski of O’Hara said she tends to shop at the Giant Eagle Market District in The Waterworks out of habit and convenience. She occasionally swings by Aldi for lower prices.
“Aldi doesn’t have everything that Market District has, but I do like their produce,” she said. “Even if they have something in stock one time, they may not have it the next time you go there. They seem to be very choosy about what they have.”
Lisha Jones of Penn Hills tends to shop at either Giant Eagle or Walmart. She prefers to use curbside pickup to use coupons and avoid the crowds.
When it comes to price comparisons, she doesn’t see much of a difference between the two companies.
“Everything is just so expensive that it’s whatever I need and happens to be on sale,” Jones said.
‘Greater share of wallet’
In an April investors’ conference, Walmart executives were optimistic about their growth.
“We believe that we have the building blocks in place to help define the next chapter of retail and do so while driving strong growth and shareholder returns,” said John David Rainey, Walmart executive vice president and chief financial officer. “Looking at where we are today, we believe that approximately 4% sales growth, and growing operating income at a faster rate, are still the appropriate targets for our business over the next three to five years.
That 4% sales growth target would add more than $130 billion of sales on top of the company’s current $600 billion base, Rainey said.
In 2022, Walmart grew U.S. sales by more than $27 billion. Sam’s Club grew sales by more than $10 billion.
And inflation has been driving more customers to the world’s largest retailer.
“If the economy is strong, our customers have more money, and that’s great,” CEO Doug McMillon said on the company’s fourth-quarter earnings call. “If things are tougher, they come to us for value. With today’s inflation, we’re continuing to see that happen. We’re gaining share across income cohorts, including at the higher end, which made up nearly half of the gains we saw in the U.S.”
“We’re also capturing a greater share of wallet at Sam’s Club in the U.S. with both mid- and higher-income shoppers,” McMillon said. “Our goal is for the experience they’re having in our stores and clubs, combined with our current capabilities for pickup, delivery and membership, to result in them choosing us even as inflation eventually subsides.”
Still, Giant Eagle, with 470 grocery and convenience stores throughout Western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana, says it is ready to face the challenge. The 93-year-old company, which recently underwent a leadership shakeup in naming its first nonfamily members to chief executive and board chair, is listening to what customers want and making changes, according to Bill Artman, interim CEO.
This week, the grocer announced it would roll out a summer price lock on 800 items and reintroduce its printed weekly circular after going digital, based on shopper feedback.
“We have to continue to take costs out of our system and plow that cost back into both pricing and reinvesting in our stores,” Artman said. “Customers want to see reinvestment in their locations because, when you talk to customers, they refer to it as ‘my Giant Eagle.’ They consider it theirs and they take ownership of it. And like anything, you know, people want to feel good about where they shop.”
“Making sure that we’re reinvesting in price, we’re reinvesting in our facilities, and that we’re leaning into technology where appropriate, so that we’re on trend,” Artman said.
“We need to be the best version of ourselves,” he said. “We can’t worry about what the other guys are doing or trying to chase everyone else. Being the best version of Giant Eagle that we can is going to help us be here for the next 93 years.”
Stephanie Ritenbaugh is a Tribune-Review staff writer. You can contact Stephanie at sritenbaugh@triblive.com.
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