In the span of a typical week, Courtney Bush will often visit three, sometimes four, different supermarkets to pick up groceries for her family.
She’ll make a run to Trader Joe’s—closest to her home near the Perkins Road overpass—at least once a week for produce, frozen items and nut butters. Whole Foods is another weekly stop, where Bush buys items like rotisserie chicken, yogurt, healthy snacks and specialty foods like almond flour tortillas.
Every other week, she’ll visit Costco for essentials like meat, produce, eggs and condiments. But Target is where she goes for cleaning and household supplies. She’ll also occasionally stop at the local stores like Bet-R Neighborhood Market and Iverstine Farms.
What about the new Sprouts at Rouzan? Bush has tried it and could see it replacing her Whole Foods trips, though she says she’s “not ready to commit” to it yet.
While this might sound like a lot of grocery shopping, experts say it’s actually becoming the norm, especially for families like Bush’s. In a dual-working household with two kids, Bush is a big fan of meal prep in an effort to eat clean in their busy lives.
“The clean eating and meal prepping journey naturally led us to shop at multiple grocery stores,” Bush says, “though I’ve always been a bit of a bargain shopper and didn’t mind shopping at multiple stores. I choose stores based on the types of food they carry—with a bent toward healthier options—the prices and how convenient they are for us.”
The fact that consumers like Bush are shopping around could help explain why Baton Rouge is able to sustain an inordinate amount of grocery stores today. Between the growing presence of national chains and a fortified group of local grocers, the fight for market share has been heating up for years. But, interestingly enough, no one has dropped out of the fray. In fact, within the past year, three new stores opened—Rouses at Arlington Marketplace, Matherne’s at Nicholson Gateway and Sprouts at Rouzan.
“I am a bit surprised Baton Rouge can support so many grocery stores,” Bush says. “Each of the stores we shop in seem to always have large crowds when we’re there, no matter what day of the week it is.”
To remain competitive, grocers are beefing up their own special selections and offerings to get customers in the door, making it increasingly difficult for people to find everything they want at just one place.
There’s also the AG factor. Associated Grocers, a wholesale grocery supplier owned by its members, is based in Baton Rouge. Because most local grocers in the city are AG members, they have collective buying power to help them compete against larger chains, which makes the market somewhat unique in that respect.
There must be a point, though, at which the city reaches oversaturation, especially as new grocery stores continue to enter the market while the Baton Rouge population stagnates.
“When Sprouts was built, I thought, ‘Geez, we’re building grocery stores on every corner,’” says Bet-R co-owner Cliff Boulden. “It’s like restaurants—everyone wants a piece of the pie, but the pie hasn’t gotten any bigger.”
The market apparently hasn’t maxed out of grocers just yet, because stores aren’t closing. Some even say there’s room to expand in Baton Rouge. But are we nearing the breaking point?
“The Southeast has been described as ‘overstored,’” says Jim Dudlicek, editorial director of national trade publication Progressive Grocer. “Whether it’s sustainable will depend on whether there continues to be a sufficient population of consumers to support the number of stores and have varied enough shopping habits to split their grocery dollars among them.”
Pieces of the pie
Change in the supermarket industry—as with the broader retail sector—is constant, says Justin Langlois, regional vice president at Stirling Properties, which works with grocery stores. And the change we’re seeing today is something of a reversion.
“In the early 1900s, people would go to three or four places—the butcher, a general store and a produce market—for groceries,” Langlois says. “We stopped doing that with the advent of Sam’s and Costco. But we’re getting back to that routine again.”
That’s because consumers want the unique brands sold at Trader Joe’s or Whole Foods, though they can’t get everything they need for a family there—or maybe not at the right price, Langlois says. And while shoppers might stop at Sprouts for its fresh produce, they may prefer Rouses or Calandro’s for the wine or meat selections.
“I’m willing to bet a lot of money (that) most people in town buy and support a minimum of three stores,” he says.
Grocery stores are also less affected by the e-commerce craze disrupting the rest of the retail sector, because it’s not as easy to deliver groceries, Langlois says, though online ordering and pickup have become popular offerings. Consumer trends also show young people, especially Generation Z, still enjoy the physical store experience, Dudlicek says.
“If brick-and-mortar weren’t here to stay, why would Amazon buy Whole Foods?” Langlois asks.
And despite what seems to be an already crowded market, Langlois says he believes Baton Rouge could actually support a few more grocery stores, noting there are outside players who would like to break into this market.
Rouses, one of the larger chains in the area, moved into the market nearly three years ago when it acquired Leblanc’s. Although the Thibodaux-based chain doesn’t have plans for more Baton Rouge stores at the moment, CEO Donny Rouse says there’s “definitely room for expansion.”
The most recent grocer to enter Baton Rouge has been Sprouts, which opened in June, much to the excitement of local shoppers. The Arizona-based chain’s real estate team had been eyeing Baton Rouge—its first Louisiana location—for a while, says spokeswoman Kalia Pang, and the Rouzan location checked all the boxes of its site selection process.
“We look for easy access, high traffic, ample parking and, population-wise, we look for more than 100,000 residents within 10 minutes,” Pang says. “For new markets like Baton Rouge, we look for an area that has increasing interest in fresh and healthy selections.”
The Southdowns area near LSU hits all those targets. It’s also a section of the city saturated with other national and local grocery stores—more than 15 in a five-mile radius. But Pang says competition is nothing new to Sprouts.
Long-time local grocers could say the same.
“You have to fight for all your business,” says Jim Crifasi, president of Hi Nabor, which has been in Baton Rouge for more than 50 years, with three locations. “We’re well saturated.”
The AG factor
Independent grocers across the country continue to fare well, Dudlicek says, in the face of intense competition from national chains. They survive by offering good service and specializing in certain items like baked goods or prepared foods. Hi Nabor, for instance, prides itself on its meat department, Crifasi says. Boulden, meanwhile, says Bet-R stands out for its service, short checkout lines and reliable employees.
Owners of local supermarkets are also closer to their customers, Dudlicek adds, so they can better keep tabs on their changing preferences. Boulden says when someone requests something special from his store, he’ll find a vendor to supply it. And while he won’t have the Trader Joe’s or Sprouts brands, he does have the staple brands people still look for like Blue Bell or Coca-Cola.
“(Independent grocers) have fewer layers of bureaucracy, so they can try new things with less red tape,” Dudlicek says. “Suppliers are also stepping up to offer independent retailers turnkey solutions for things that smaller operators might otherwise be hard-pressed to offer compared to larger chain retailers, such as online ordering, delivery and other tech-related services.”
This is where AG comes in clutch for local Baton Rouge grocers. Most of the local stores here are members because “it gives us buying power to compete,” Crifasi says. The wholesale supplier also acts as a resource for its member stores, offering marketing tools and store advisors, among other things.
Having AG right in their own backyard means Baton Rouge grocers are on a different playing field than other parts of the country, says local chef Jay Ducote. It’s why small grocers are able to operate like a big chain, in a way, through the AG network.
“All of our independent grocers have been able to survive and thrive through a distribution partner that they’re actually owners of,” Ducote says. “That’s not how local grocers in other parts of the country work.”
Over the past year, AG has been in the midst of a transition, with a new CEO and its earnings on the rise after years of declines. In 2018, the wholesale supplier’s revenues increased 1.11% to $637 million, according to Business Report’s Top 100 Private Companies list, where AG has remained in the prestigious top 10 for years.
“I’m more excited about AG than I have been in a long time,” says Crifasi, board chair of the nearly 70-year-old company. “I’m excited about the leadership changes. It’s a positive change.”
New CEO and President Manard Lagasse Jr., who has been with AG since 2007 as general counsel, succeeded Emile Breaux in May. Two months later, AG announced a slew of other leadership changes in an effort to enhance AG’s position for growth. While Lagasse hasn’t laid out any plans for major company changes, he says he’s committed to AG’s focus on independent grocers and expects continued growth.
AG currently serves 198 member stores throughout Louisiana, Texas and Mississippi. Crifasi says the company plans to pursue additional store customers going forward.
Age of the consumer
So will there be any more stores entering Baton Rouge in the near future? If so, which brands? Or will we see more expansions of local operators, like Matherne’s and Rouses have done over the past year?
It’s hard to say. In terms of national players, there are several that have operated right outside the Baton Rouge area perimeter but have yet to break in. Think of Publix, which many locals know from their beach trips to Alabama and the Florida Panhandle. Or Brookshire Grocery Company, which has locations in north Louisiana and owns Super 1 Foods stores in Acadiana. Other big names like Kroger and Aldi aren’t so far away either.
But most of those chains like to enter a market with a splash, meaning buying or building three or four stores at once, Langlois says. And in a crowded landscape like Baton Rouge, that would be hard to do.
For now, though, Baton Rouge shoppers certainly have their fair share of grocery store options from which to choose.
“More so than ever, consumers are shopping in multiple stores and in multiple ways,” Dudlicek says. “We are truly in the age of the consumer, who enjoys an embarrassment of riches both in the types of products available and the venues in which to buy them.”