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Dollar, convenience stores luring shoppers out of supermarket aisles

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A ShopRite spokeswoman said other food retail outlets are competition, but in
A ShopRite spokeswoman said other food retail outlets are competition, but in "a much different format" than other grocers. (File photo)

American shoppers are looking for grocery values at nontraditional locations at a higher rate than ever before, according to a survey by Fort Lee-based Perception Research Services.

The survey found 35 percent of shoppers have purchased groceries at dollar stores, 47 percent at drug stores and 24 percent at convenience stores.

"Our latest findings on grocery shopping indicate how very discerning today's shoppers are about their venue preferences as well as brand choices," said Jonathan Asher, PRS executive vice president. "Retailers must understand their competitive strengths and capitalize on them while also making the necessary adjustments to their offerings to seize opportunities for a larger slice of the pie."

For ShopRite, the retail arm of Elizabeth-based Wakefern Corp., the other food retail outlets are competition, but in "a much different format" than other grocers, according to spokeswoman Karen Meleta.

Meleta said ShopRite's focus on fresh food and service — along with a wider range of variety — is what distinguishes it from other retailers and drives consumer loyalty. She added that the company is "more sensitive than ever" to the need for value, and the procurement experts for the company are "buying right and buying smart."

The PRS survey shows while consumers target supermarkets like ShopRite for variety and selection, when shoppers target a retailer for price, they look to dollar stores and mass merchandisers, like Wal-Mart and Target.

Dollar stores and other budget retailers also are being targeted to anchor shopping centers in the New Jersey, especially locations that previously were home to supermarkets. Matthew Harding, president and chief operating officer of Levin Management, in North Plainfield, said the company recently signed a lease with Big Lots, in Barnegat, to fill an empty A&P location.

Harding said dollar stores going into shopping centers that already have grocery stores will find use restrictions on the amount of food they can carry. A Dollar Tree store entering the Mount Holly market will likely have to curb its food inventory, he said.

"With dollar stores, you do see them go into more and more locations, and maybe better locations than you would've expected in the past — and I think that's twofold," Harding said. "There's more space available, and consumers across the economic spectrum are looking for value and finding value in dollar stores or stores like Big Lots."

"The discount store phenomenon is reflective of a prolonged economic recession," said Stephen Hittman, president of Crossroads Cos. LLC, in an e-mail. "Various retailers, drug stores, discount stores, gas stations, Starbucks and Dunkin' Donuts are selling more food for off-premise consumption, due to competition in their own industry and smaller profit margins."

Crossroads, based in Mahwah, specializes in grocery store-anchored shopping centers.

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