Top Discounters, Costco Dominate GM Market

MMR, June 25, 2001

NEW YORK -- Mass market general merchandise retailing is overwhelmingly a

story of the dominance of national chains, and of Wal-Mart Stores Inc. above all. The regional discount store operators that once played a major role in the segment are largely gone, with only a few having a limited impact in a handful of markets.

However, while Wal-Mart continues to dominate the sector, it is far from being the only powerful player. Costco Wholesale Corp. has demonstrated the power of its warehouse club format, boasting the leading market share in no fewer than 25 of the top 100 markets, while holding the second-largest share in an additional six.

Kmart Corp. has the leading share in just eight markets, although it holds the No. 2 spot in 32. Rival Target Stores has achieved consistent financial success by being No. 2. While Target is the leader only in its home market of Minneapolis and Omaha, the upscale discounter has managed to gain the second-largest share in 23 markets.

One regional chain continues to show remarkable resilience. Meijer Inc., based in Grand Rapids, Mich., holds the largest share in no fewer than 13 markets. Most impressive is the supercenter operator's ability to fend off competition from its bigger rivals. In fact, Meijer has for several years consistently beaten Kmart in the battle for Michigan, taking the leading market share not only in Kmart's home base of Detroit, but also in Grand Rapids, Kalamazoo/Battle Creek, Ann Arbor, Lansing/East Lansing, Flint and Saginaw.