Wegmans opens a 3d giant store in Philadelphia suburbs

Here comes Wegmans - again.

The regional grocer's answer to Wal-Mart opened its newest store on the site of a former steel plant in job-rich Chester County.

It is the sixth Wegmans in the region and the third in the greater King of Prussia area, which is unusual for a chain that typically spreads its food emporiums an hour apart.

The 650-employee Malvern store opened Sunday with a crowd of about 800 lining up outside the doors at 7 a.m. and about 200 Wegmans employees from other areas lodged at local hotels to help with the festivities.

Wegmans now has giant stores in Collegeville, Downingtown, and Malvern, well-off suburbs that fit the supermarket's criteria for new stores. A fourth Pennsylvania Wegmans is in Warrington, Bucks County. The chain also has stores in Cherry Hill and Mount Laurel.

The chain's retail concept marries a large supermarket that competes on price with an equally large prepared-food section, or food court.

Wegmans executives say they have been encouraged by the popularity of its take-it-and-go prepared-food section in the Philadelphia area. The percentage of prepared meals sold to customers, they say, is higher in this region than in other places.

"It's the antithesis of the big box," Danny Wegman, the chief executive officer, said in a phone interview last week of the chain's format. "It's really a lot of small boxes in one place."

Periodically, a retail format captures the zeitgeist of the time. Starbucks Corp., for instance. Wal-Mart Stores Inc., for another. It's too soon to say whether Wegmans has. But this Rochester, N.Y., grocer with 76 stores in the Northeast and about $5 billion in annual sales has definitely gotten the attention of the food-chain watchers.

Jeff Metzger, publisher of Food Trade News, said Wednesday that Wegmans stores take business from several retail channels when they enter an area: traditional supermarkets, convenience stores, discounters, and restaurants. According to the June edition of the Food Trade News, Wegmans now has 2 percent of the Philadelphia region's food sales among all distribution channels, ranking just below BJ's Wholesale Club Inc.

Metzger noted that one of the region's top-volume Acme supermarkets is about three miles away in Paoli. Acme Markets Inc. is the Philadelphia region's largest supermarket by market share.

Located in a largely incomplete mixed-use project by O'Neill Properties Group L.P., the new Wegmans is a stone's throw from Vanguard's headquarters. The nearby Great Valley Corporate Center is a major job center for the region. Together, they would seem to offer the time-stretched-but-particular customer Wegmans seeks to attract.

A Target, expected to open next week beside the Wegmans, is the only other completed development in a complex that was supposed to be 1.6 million square feet of housing, shops, entertainment venues, and high-value office space. Developer Brian O'Neill's litigation against lender Citizens Bank has halted further construction. The future of the site is uncertain.

The new Wegmans was packed with shoppers Tuesday afternoon - many of them in the bustling prepared-food section and a full-service pub. Some of them were dressed in business attire and eating lunch. "We're definitely tapping into a corporate clientele," said Jerritt Branagan, the area perishables manager.

Among other amenities was a vegetarian bar with salads, tofu, and hot vegetable flan.

Ralph Uttaro, Wegmans' senior vice president of real estate development, said the chain looked for sites of about 20 acres - which seems to rule out a store in the city.

The Malvern Wegmans, one of only two new stores the chain will open nationally in 2010, is 130,000 square feet. About 450 employees are considered part-timers and 200 full-timers, managers say. The nonunion Wegmans has consistently ranked high in Fortune magazine's annual best places to work survey, right up there with Google Inc.

Wegmans officials note that 20 percent of its employees are related by family, a sign that the stores are highly regarded workplaces.

For years, Chester County has been the site of grocery battles. It is the logical place for regional growth as the Philadelphia region sprawls westward along the Pennsylvania Turnpike.

Wal-Mart, the world's largest retailer, opened its first Supercenter in far western Chester County about 10 years ago.

Danny Wegman is respectful, but not cowed. "It's volume per store," he said. "I don't think anybody is close to us." The typical Wegmans store generates about $1.5 million in revenue a week from an estimated 50,000 customers. Added Wegman: "I think we are a life-changing experience, and I say that with humility."

Founded: 1916

Headquarters: Rochester, N.Y.

Owner: The Wegman

family

2009 sales: $5.15 billion

Rank: 28th-largest U.S. supermarket chain, based on sales

Employees: 39,000

Stores: 76, including 14 in Pennsylvania and seven in New Jersey

Store size: 80,000 to 140,000 square feet

SOURCE: Wegmans Food Markets Inc.

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Retailers selling the largest amount of food in the eight-county area in the year ended March 31, 2010.

Rank          Chain               Sales, in millions    Market share

1          Acme                   $1,758.1           11.86%

2           ShopRite                  1,623.0           10.95

3           Giant                     1,448.4             9.77

4           Wawa                     1,355.1             9.14

5    A&P/Super Fresh/Pathmark     1,009.4             6.81

13          Wegmans              309.9               2.09

SOURCE: Food Trade News

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