EAU CLAIRE, Wis. -- Home Depot has raised some eyebrows over its flirtation with convenience stores, groceries and gasoline. Now rival home improvement chain Menards is also getting into the convenience act.
The chain has added a grocery section to many of its stores, reported The Star-Press, Muncie, Ind. A few weeks ago, refrigerated cases full of milk and eggs, freezers stocked with pizzas and racks of bread and snacks were installed in the Muncie store, it said.
The addition is part of an effort to provide convenient staples [image-nocss] for customers and jump into the increasingly competitive market for groceries. "It's not companywide, but quite a few of us are doing it," John Keller, general manager of the Muncie Menards told the newspaper. "The idea is convenience groceries. If someone is here and shopping, they can get a gallon of milk."
He said the groceries are likely to appeal to many of Menards' regular customers. "A lot of it is man food," Keller added.
Retailers don't enter the grocery business on a whim, but there's plenty of reason to sell milk and peanut butter, said the report. According to the Food Marketing Institute (FMI), total U.S. supermarket sales in 2005 reached $478 billion. FMI said average weekly household grocery expenses range from $50.50 for a one-person household to $140.40 for a five-person household. Of every $100 spent, $50.31 is spent on perishables, $11.39 on other groceries and $8.05 on beverages.
The average customer makes 2.1 trips to the supermarket every week. If nontraditional grocery sellers like home improvement and drug stores can cut into that number, they can cash in.
Bill Greer, director of communications for FMI, told the paper that groceries at Menards and similar retailers showed how cutthroat the business was. "That's just a manifestation of how competitive is has become," he said. "Almost every retailer is looking at selling some food, and at the same time, grocery stores are selling nonfood items. Everybody's getting into everybody else's business."
David Livingston, a Wisconsin-based supermarket industry expert, said retailers like Eau Claire, Wis.-based Menards posed little threat to traditional grocers. "People aren't going to do serious [grocery] shopping at home improvement stores," he told the Star Press. "There is some demand for convenience items."
Keller said Menards has had good response since it began selling groceries in February. "We're pretty happy with it," he told the paper. "We're really happy with the way sales are going."
He added, "We had some contractors surprised we were taking away shelf space for traditional hardware product, but in changing our racking and the store layout, we didn't lose anything.
Not all shoppers are sold on the concepteven those who have bought food at Menards. Erin Griffith and her husband bought "snacky stuff" like granola bars and Rice Krispie Treats at Menards, but Griffith said she was not likely to do much grocery shopping at the home improvement store. "It's handy," she told the paper. "I probably wouldn't buy anything perishable there. It just feels wrong."
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