Moran Foods (dba Save-A-Lot, Ltd.) is growing a lot because its customers don't have to pay a lot. The extreme-value grocery chain operates more than 1,185 stores in about 40 states under the Save-A-Lot banner. More than two-thirds of the stores are licensed; the rest are company-owned and -operated. Save-A-Lot stores offer a limited assortment of items (about 1,250 of the most frequently purchased grocery products) at prices up to 40% lower than conventional grocery stores. The company has sold its Deal$ - Nothing Over A Dollar chain of stores, acquired in 2002, to Dollar Tree. Founded in 1977 by William Moran, today Save-A-Lot is a subsidiary of grocery retailer and wholesaler SUPERVALU.
A leader in the extreme-value grocery market, Save-A-Lot's niche is getting crowded as rival ALDI expands throughout the US, and non-traditional purveyors of groceries, including the dollar stores operators Dollar General and Dollar Tree, sell more consumable products. The deep recession in the US has been a boon to discount retailers, including retail giant Wal-Mart, as shoppers look to save money on basic needs. Turning the tables on dollar stores, Save-A-Lot offers plenty of general merchandise and consumables priced at $1 in its Dollar Departments.
Fast-growing Save-A-Lot has ambitious growth plans. Indeed, the discount grocer aims to increase its store count to 5,000 (up from just under 2,000 in 2010). Much of that growth will be in urban areas, including Washington, D.C., that are underserved by food retailers in general. Eventually about half of Save-A-Lot stores will be located in metropolitan neighborhoods.
Indeed, Save-A-Lot targets households with incomes of $35,000 or less. As a result, the no-frills grocer will locate stores (typically about 15,000 square feet in size) in poor urban areas that are often bypassed by larger discount chains, such as Wal-Mart. Currently, about one quarter of Save-A-Lot stores are located in urban areas. City stores may eventually account for half of the company's locations.
Save-A-Lot began opening stores along the Gulf Coast of Texas in 2007. In 2006 the discount grocery chain expanded to the Pacific Northwest with four stores opening in Portland, Oregon. The company also launched units in Tacoma and Pasco, Washington. It sees potential for as many as 100 stores in the area.
Founder Moran stepped down as president and CEO of Save-A-Lot in May 2006, and was succeeded by former COO Bill Shaner. – less