Supermarkets Use Gas, No-Frill Formats to Extend Brands

NEW YORK — To offset the effects of a national recession, supermarkets across the country are searching for ways to enhance their brand impact. Winn-Dixie, one of the nation’s top ten supermarket chains, is extending its discount warehouse Save Rite division in the metro Atlanta area by rebranding some of its 40 locations there, building new Save Rite markets or possibly reopening previously closed Winn-Dixie stores.

The Atlanta area is undergoing major changes in the supermarket category. Supervalu-owned Cub Foods, A&P and Harris Teeter all have recently exited the region, and longtime area mainstay Harry’s Farmers Market sold off many of its stores to natural/organic chain Whole Foods last month. Jacksonville, Fla.-based Winn-Dixie is trying to become more aggressive in order to catch volume leaders Wal-Mart, Ingles, Publix and Kroger, which hold the region’s top four spots, respectively, based on grocery sales. German-based Aldi, which has 600 supermarkets in the U.S., also plans to open five smaller no-frills warehouse formats in the Atlanta area next year.

In California, Sacramento-based Raley’s supermarket plans to open its first gas station in 2002, which will be adjacent to a 65,000-square-foot store now under construction. Raley’s, which operates about 150 stores and competes directly against the likes of category giants Safeway and Albertsons, also plans to open its first convenience store/gas station combo. If these initial attempts are successful, Raley’s says it may expand the program throughout its northern California, Nevada, New Mexico territories.