Shop 'n Save customers fear higher prices as Schnucks takes control of 19 stores
The news that her Shop 'n Save in Shrewsbury will soon transform into a Schnucks wasn’t welcomed by LaDonna Slovensky.
“If it’s going to be a Schnucks, I probably won’t shop here,” the Affton resident said as she unloaded groceries from a shopping cart into her car. “I’ve always been partial to Shop 'n Save. I’ll probably find another place to shop. Schnucks is a little too expensive for me.”
Schnucks this month announced its acquisition of 19 Shop 'n Save stores from parent company SuperValu. All of the stores are scheduled to be rebranded as Schnucks by the end of October. But consumer perception that Schnucks is a high-priced grocer may be one of the biggest challenges facing the company.
“I expect there will be some hemorrhaging of those consumers who were price sensitive,” said Jim Fisher, marketing professor at Saint. Louis University.
Another 13 Shop 'n Save locations will close in November if a buyer is not found, according to SuperValu.
Grocery growth spans three generations
Family-owned and St. Louis-based, Schnucks has grown from a small meat wholesaler in 1937 to the 16th largest privately-owned grocer in the U.S., according to Forbes. It operates more than 100 markets and pharmacies in Missouri, Illinois, Indiana, Wisconsin and Iowa, and has 13,000 employees.
Schnucks’ last big growth spurt took place in 1995 when it acquired the National Supermarket chain’s 57 stores in the St. Louis region.
Fisher said Schnucks was able to successfully integrate the National chain under its banner. He expects a repeat performance with the Shop 'n Save acquisition.
“There will be some fallout at the consumer level,” he said, ”but Schnucks is a great retailer and I suspect they will be able to retain a lot of the customers who are shopping at Shop 'n Save.”
Price sensitive shoppers may not be easy to win over.
At the Shrewsbury store, several loyal customers, like Robinette Chandler, equated Schnucks with higher prices.
“Some people can’t afford Schnucks items because they’re too high,” said Chandler. “I think it really does suck that there won’t be another Shop 'n Save.”
Affton resident Jesse Banta was shopping with his wife and two children. They were surprised to hear about Schnucks taking over Shop 'n Save.
“All the stores that charge decent prices are going out of business now,” Banta said. “The stores that are charging pretty much double are taking over.”
Supermarket shakeup is national trend
SuperValu announced plans to exit the retail market last spring when it put the Shop 'n Save grocery chain on the market. Then, SuperValu was acquired in late July by United Natural Foods Inc., a natural and organic food distributor whose primary customer is Whole Foods Markets.
Tory Gundelach, a retail analyst at Kantar Consulting, said the supermarket shakeup that’s happening in St. Louis is also happening nationally.
“It’s definitely a trend that we are seeing all over the country,” she said.
“Locations are changing hands or being closed as the shuffle between physical and online shopping really sorts out.”
Discount chain Aldi has plans to expand its number of stores in the U.S., including St. Louis, by nearly 50 percent over the next several years according to Russell Redman, senior editor at Supermarket News.
“When Aldi enters a market, its everyday low prices often force other grocery retailers to lower their prices,” said Redman.
That could be good news for shoppers mourning the loss of Shop 'n Save.
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