Colossal competition

WILLOW GROVE, Pa. - Just off the produce aisle in the newest supermarket here is a room with concert-like flat screens, rows of seats and a massive stove beneath video cameras.

This is the cooking school at Super Giant. It is next to the dietitian's office. Which is next to the wireless cafe. Which is by the free day-care center and valet checkout.

A sprawling wing upstairs is called the community center. Its meeting rooms resemble what you'd see at a hotel.

Did we mention this is a grocery store? And it's nearly the size of two football fields?

When it opens Wednesday, this Giant Super Food Store will be the Carlisle, Pa., company's largest supermarket in Pennsylvania - a 97,300-square-foot homage to a kind of one-stop shopping that is sweeping the supermarket world.

By May, there will be three gigantic supermarkets within a few miles of each other here in the Route 611 corridor in Montgomery and Bucks Counties. They are waging an escalating war for market share that centers on a bigger-is-best strategy that could be called extreme grocery shopping.

Wegmans, 10 minutes up the road in Warrington, at 125,000 square feet, is so eager for high-end wallets that it is seeking permission to serve glasses of wine and beer to customers. It has a 200-seat dining hall above a cozy gourmet food court that has served breakfast, lunch and dinner since the store opened in October 2006.

And just two miles from the Super Giant here, in May, Wal-Mart is set to open its second Montgomery County Supercenter - a 195,000-square-foot model that contains a full-size supermarket alongside the retailer's traditional discounted merchandise.

The grocery chains believe big is best because you can fit the most diverse stuff and things to do in one big store. This, they believe, is what attracts today's one-stop consumer from heading off to the competition, which is everywhere.

"I know the Wal-Mart Supercenter is going to be a huge success; we know the Wegmans in Warrington is a huge success," said Giant chief executive Carl Schlicker. "But for us, the Greater Philadelphia area is a place where we think we have substantial room to grow more stores."

The competition will be intense.

"All the existing players are going to feel it because these are two high-Richter-scale entities," Jeff Metzger, publisher of Food Trade News, said of the arrival of Giant's and Wal-Mart's large stores here this year.

Both "are very viable threats," said Blaine Bringhurst, senior vice president of merchandising and sales for Acme Markets, a company that dominated regional sales in 2007.

Giant, owned by Dutch parent Royal Ahold N.V., competes with Wal-Mart in 60 percent of its locations and Wegmans in about 30 percent of its locations. Its only other super-size store, in Camp Hill, is near both competitors and has done well in drawing customers searching for a broader array of merchandise and service, said Schlicker.

Willow Grove is attractive because it is near a Pennsylvania Turnpike interchange, residents live in densely built postwar split-levels and newer subdivisions toward the bucolic north - and they have money to spend.

According to the 2000 Census, median household incomes along Route 611 were choice for retailers: Willow Grove, $50,378; Horsham Township, $61,998; and Warrington Township, $66,364.

"We are very much interested in developing more and more locations out in the Greater Philadelphia area," said Schlicker. "We are working hard on trying to get to a No. 1 position."

The fight for sales dominance is tougher than ever because supermarkets have lost customers to dollar stores, chain restaurants that offer takeout meals, and big-box stores such as Target, BJ's and Costco, which tempt with low prices.

"Everybody's trying to get a piece of the share of stomach," said former Giant chief executive Tony Schiano, now an industry analyst. Schiano led Giant through its acquisition of Clemens Markets in 2006 - a move that gave the chain 13 new stores in the area.

Wal-Mart Supercenters also are arriving in the Philadelphia suburbs in full force this year. So far, there are only two in the five-county area compared with 83 across Pennsylvania.

Four more will open this year - in Willow Grove, Norristown, King of Prussia and the Levittown/Fairless Hills area, said Wal-Mart spokesman James C. Davis.

To keep shoppers loyal, local supermarkets over the last 18 months have gotten bigger, fresher and healthier.

Their displays now copy the whole-foods movement and its specialty items, big-box stores and their "unbeatable" prices, and retailers such as Wegmans, which have turned shopping into a spa-like gourmet escape full of perks.

Wegmans was one of the first to adopt the all-things-to-everybody approach by building huge stores and turning them into destinations.

It built an 86,500-square-foot store in 1986 in Corning, N.Y., and expanded it to 98,000 feet several years later to include an in-store cafe, said spokeswoman Jo Natale of the Rochester, N.Y., chain.

The organic and health-food sections of the Super Giant here and of Wegmans nearby in Warrington are similar. They are offset with distinctive display and design features that really stand out. This "store-within-a-store" concept is copied in other sections, too, to help shoppers find things easily.

Both stores also have take-out or eat-in food stations, with meals prepared by on-site chefs or other trained culinary professionals, and they have in-store dining areas.

At Wegmans, there are countless workers behind colorful food stations framed by wall designs that make this part of the store look like a small outdoor market. Seating on a second-floor mezzanine overlooks the bustle below.

Customers and servers even know each other by name.

"Ganna - the lighter one or dark?" asked Terry Shea, 43, pointing to a tray of salmon steaks that customer Ganna McGowan, 36, had ordered during a visit Friday.

"That one, Terry," said McGowan, as her children, Maiah, 2, and Logan, 4, munched on bagels by her side. Seconds later, the two women traded animated stories about a recent snowstorm.

"We gave up Genuardi's just because of Terry," chimed in another regular customer, Jim Chromey, 70, of Doylestown, as he waited to order.

Customer service, fresh food and prepared meals are the way many supermarket chains, large and small, have recently decided to lure customers back from big-box competition like Target, said Metzger.

Most new supermarkets are between 55,000 and 75,000 square feet, he said. For them, instead of building big, they work the fresh-and-nice angle.

Acme, whose markets average 55,000 square feet, is remodeling stores and building new ones with wings referred to as "Premium Fresh and Healthy."

It unveiled this redesign for perishables and gourmet items in late December 2006 at its Doylestown store about 20 minutes north of here. They are now in 20 stores. More are planned.

"Against a Wal-Mart Supercenter, we are going to have an edge on giving better service," said Bringhurst.

Even Giant believes its small stores and their emphasis on good prices and good food are vital to its future.

"We know some people are going to find this store way too big," said Schlicker. "In that case, we have a store up the road of 35,000 square feet in Abington and of 40-something square feet in Horsham."

The name of the game?

"There's alternatives," he said. "There's convenience."