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Two large companies are betting that Bradenton consumers are hungry for grocery alternatives. Gordon Food Service and Aldi USA both bought land in central Bradenton — less than three miles from each other — with plans to open 17,000-square-foot grocery stores later this year.
In February, Aldi USA purchased a 10,076-square-foot former Lone Star Steakhouse on Cortez Road near 47th Street. The German company plans to open an Aldi store there in the fall or late summer.
Earlier this month, food distributor Gordon Food Service bought the 41 Center, a small strip center on 14th Street and Orlando Avenue, to redevelop into a GFS Marketplace store. Gordon Food Service expects to open the new store in September.
Grocery consultant Mark Gallagher, co-owner of Florida Capital Business Brokers Inc. in Sarasota, thinks the key to their optimism is the business model for the new stores.
“If I were going to open a new grocery store in Florida, it would be the limited assortment concept,” he says. “They have lower labor costs. They also have less margin, but they have those lower costs.”
Simple steps like leaving groceries in a box rather than having an employee stack the groceries on shelves can have a big impact on the bottom line, according to Gallagher.
The smaller limited assortment stores can also better compete with the larger chains, such as Wal-Mart and Publix, because they're specialists; they can focus on pricing a fewer number of items. Small stores can also focus on making sure the meat, produce and deli counters are at the lowest price, areas that are still difficult for the big traditional grocery chains.
“The same customer that's going to shop with them is still going to go to Wal-Mart, because they have a limited product line,” Gallagher says. “But they can offer [what products they have] for less.”
Another trend working in favor of the new stores is lower real estate prices, which translate into more prominent locations and fixed costs.
Although both of the new stores share similar business models; they have their differences. Aldi stores promote their no-frills low-cost store brand products to the general public, while Gordon Food Services leverages its distributorship experience, with a focus on selling restaurant-quality food and food service supplies to both businesses and consumers.
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