August 18, 2014

The Next Generation of Stores May Not be Supermarkets

New York...Kosher consumers living in large urban areas are less likely to see the launch of new supermarkets with large kosher sections as was the case in the last 25 years. Many of the large supermarket chains that invested heavily into kosher are facing challenges from the likes of Costco and Wal-Mart with profits declining. They are also much more reticent about opening new stores in crowded cities where a good portion of the Jewish and kosher population lives. Nor will the growth come from the large club and specialty stores. Fairway, which appeared to be on course to open many more stores in urban areas recently announced that it was slowing the growth. Fairway has made a major investment in kosher that extends even extends into kosher catering. Instead, the growth is likely to come from the independent kosher stores as industry sources say that they are aware of at least three new stores that are set to open in New York and New Jersey in the next year and others in the planning stage. It is also these stores that represent growth in terms of demographics and volume.

One notable exception is Chicago where Wal-Mart recently opened a new store with a full kosher section, including Cholov Yisrael and special checkout counters with covers over racy magazines to attract Orthodox Jews.  Also set to open is a new Mariano’s which will also carry a full kosher selection creating enormous competition for stores like Jewel’s and established independents like Hungarian Kosher. In Miami, Publix has slowly added many new kosher items while Winn-Dixie continues to expand its kosher options in many stores. This is also the case in many other large cities.