Grocery store wars: Walmart, Central Market post big gains as Whole Foods drops – Dallas News

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Focus on digital 

While new stores are still important for grocers, technology is forever part of the equation now.

Shoppers using curbside and home delivery “purchase larger baskets, purchase more frequently and have high satisfaction,” said Paul Tepfenhart, senior vice president over technology for Central Market and H-E-B.

“Digital solutions” are H-E-B’s latest focus, Tepfenhart said. H-E-B announced last week that it’s building a second technology hub in San Antonio after opening its first one in June in Austin. Walmart and Sam’s have opened tech hubs in Plano and Dallas.

In the short term in Texas, Walmart should be more worried about H-E-B than Amazon, he said, “and this is Kroger’s game to lose here in Dallas.”

“Everyone is shoring up their borders and getting ready for a fight,” Reily said, if and when H-E-B decides to expand into Dallas with its traditional grocery stores.

H-E-B, which dominates in all of Texas’ other major metro areas, has declined to say when it will expand into D-FW.

Large real estate investors are closely watching the supermarket business, said Robert Young, Dallas-based Weitzman’s executive managing director.

“They’ve been looking at their portfolios and moving to grocery-anchored shopping centers, favoring them as big box power centers have lost some of their moxie because there are fewer big box retailers,” Young said.

At the same time, grocers are trying to figure out and adjust their own real estate with a digital lens, he said, and sometimes developers have to respond. Central Market will open curbside pickup in October at its Southlake store. The shopping center moved Toy Maven to another space to give Central Market room to build its online drive-up on the side of its store.

D-FW is a microcosm of all that’s happening in the $800 billion-a-year U.S. grocery and consumables market. The Food Marketing Institute and Nielsen forecast that online grocery shopping will reach $100 billion, or $850 a year per U.S. household, by 2022 or 2024. At that time, 70% of consumers will be doing some of their grocery shopping online.

Grocery was fueling 15 new developments a year locally as recently as 2015, said Jeff Kittleson, senior vice president of retail services in Dallas for CBRE. “Investments in online are taking money away from brick-and-mortar investment,” he said.

Many supermarket chains are assessing what to do with their underperforming stores and experimenting with various size ranges they want to go forward with, Young said.

“And instead of opening a lot of new stores, they can renovate locations where there’s potential. Some really need it,” he said.

Twitter: @MariaHalkias