Wal-Mart Shakes Up Grocery Scene

Wal-Mart’s growth strategy is poised to overtake Jewel and Dominick’s as the leader in Chicago’s $12 billion grocery market.  Though not viewed primarily as a place to buy food, Wal-Mart’s new super centers, offer savings in the 10 to 15 percent range over traditional grocery stores.  Wal-Mart currently has 16 grocery stores in Chicago’s suburbs, eight of which have opened in the last 15 months.

This move is part of a national trend favoring big-box retailers which buy in larger volume and have greater control over their supply chains to offset pricing.  It will be interesting to see if Wal-Mart’s move affects the top of the market, where boutique stores like Whole Foods and Wild Oats have captured the market for organic produce.

Wal-Mart is not shy about its expansion plans for the Chicago market.  Union and political resistance stalled plans to add to the single Wal-Mart store within city limits.  Suburban communities, on the other hand, welcome the tax dollars that Wal-Mart brings to them.  Current plans call for Wal-Mart to add seven new grocery stores in the Chicago area over the next year.