To Your Health

When you think about specialty food retailing today, it’s not about the Asiago cheese, the kalamata olives or the buffalo meat. It’s about the elephant.

Or, to be more specific, it’s about Wal-Mart – the 9000-pound elephant sitting in the middle of nearly every supermarket in the country. In the 20 years since Wal-Mart launched its grand hypermarket experiment, selling towels and tomatoes in the same store, it has become the biggest grocery chain in the country and forced all the rest to re-examine their ways. Several pages in this issue have been devoted to how some of the biggest names in the business – Publix, Safeway, Whole Foods – are doing just that.

Wal-Mart is struggling like most retailers, even with its everyday-low-prices strategy. When it posts even a desultory 2.5 percent monthly or quarterly same-store sales gain, most of that growth is from groceries. According to a recent Business Week article, grocery makes up about 32 percent of Wal-Mart’s total annual sales, or $120 billion. The average checkout bill for a Wal-Mart customer has gone up, too, Business Week reports.

Rising gas prices have also played right into Wal-Mart’s hands. Consumers are consolidating their shopping trips as much as possible to one store, especially in rural areas where shoppers have to drive greater distances and where Wal-Mart has about half of its stores. For a while, we were hearing about shoppers who might visit Kroger, Whole Foods and Wal-Mart in the same day. Well, with unemployment high and housing values low, guess which two of those legs are most in danger of being eliminated from the stool.

So here’s what the competition is doing. As Wal-Mart grows its hypermarkets (it recently announced a 260,000-square-foot store in upstate New York), its rivals are building smaller, more shoppable, more intimate stores. The term you’ll see several times in this issue is “farmer’s market.”

As Wal-Mart emphasizes the low, low prices of its commodities, the others are concentrating on attractive, higher-end specialty items – organic, natural, free-range, farm-fresh, imported, antioxidant, herbal, homeopathic, aged, fresh, gourmet. Not only are the products attractive, but so are the settings: dramatic lighting, warm materials and vibrant colors that would make Neiman Marcus envious.

Supermarkets are also assaulting shoppers’ consciences, building stores that are energy-efficient, sustainable and LEED-certifiable. You’ll read about a dizzying array of notions retail designers are employing to save our forests, cleanse our air and breathe life back into our polluted systems.

These efforts will also breathe life back into the retailers’ bottom lines. Not only is LEED certification good for the planet, it brings with it significant tax rebates.

Seems like a win-win.