A small-format discount grocer and regional powerhouse ranked as the fastest-growing U.S. supermarket retailers in 2022.
Aldi was once again the leader of new store openings, adding 87 stores in 2022, totaling 1.87 million sq. ft. of new space, according to a JLL research report entitled “Grocers grow formats big and small.” Much of Aldi’s expansion was focused predominantly on the Southeast and Gulf Coast. The company is planning to open some 100 stores in the Gulf Coast, and recently opened a new distribution center in Loxley, Ala., to support its expansion.
H-E-B also displayed significant growth in 2022. Although the San Antonio-based chain only opened 12 new stores, it added roughly 1.2 million square feet of new space due to its larger “experiential” format that includes such offerings as tortillerias, BBQ restaurants and garden departments.
H-E-B moved into North Texas and the highly competitive Dallas–Fort Worth area in 2022, opening its first location in Frisco in addition to multiple land purchases in the area, JLL noted.
Publix, Grocery Outlet
Other fast-growing grocers included Publix and Grocery Outlet. Publix added roughly 1.2 million sq. ft. of space last year, predominantly throughout the
southern region, including continued expansion in its home state of Florida. The retailer made its first entry into the Kentucky market with the opening of three new stores, with plans for a fourth in 2024. Kentucky is the eighth state of operation for the regional grocer.
Grocery Outlet opened 28 stores in 2022.
While most new stores were on the West Coast, Grocery Outlet also continued its East Coast expansion with new stores in Maryland and Pennsylvania. Overall, 2022 was a strong year for Grocery Outlet, with third-quarter reported net sales having increased by 19.4% year-over-year.
Rounding out the top five fastest-growing grocers were Whole Foods Market and Sprouts. Whole Foods opened 11 stores, adding 418,000 sq. ft., and Sprouts opened 16 new locations, for a total of 384,000 sq. ft.
Several grocers explored new formats in 2022, the report said.
• Schnucks debuted its convenience brand, Schnucks Express, in August 2022.
• Save Mart, the subsidiary of Lucky Bayview, opened a small-format, full-service grocery store in San Francisco.
• Meijer, which introduced several smaller-format stores of 75,000 to 90,000 sq. ft. in 2020, announced plans to introduce a small-former grocery store, Meijer Grocery, in 2023. (The concept is now open in two locations.)
Among their advantages, small-format stores are cheaper to build and require less land or space to buy or lease.
“This allows access to more markets than a larger-format store would. Furthermore, as retailers continue to invest heavily in e-commerce, these smaller stores can act as fulfillment centers for online orders,” the JLL report stated.
Other highlights in the JLL report are below:
• Average volume per month for grocery-anchored retail fell from $1.5 billion in the first half to $852 million in the second half of the year, excluding entity-level sales. Despite this, grocery-anchored retail posted a second consecutive record year with roughly $14.7 billion in total transaction volume (30.5% of all sales by volume), a nearly 15.6% increase over 2021).
• More food shoppers have returned to shopping in store, which has caused e-commerce grocery sales growth to taper off. However, retailers continue to invest and partner with third-party delivery services.