In the seven-minute drive from her house in an affluent suburb of northern Dallas, she snubs an Albertson's and two Tom Thumbs before piloting her Ford Expedition into the parking lot of Central Market-the kind of store where monkfish dangles on display in seafood and endless varieties of cheese fill the dairy case.
Fresh from yoga class with her 4-year-old son in tow, 41-year-old Ms. Zumwalt spends three hours and more than $125 on this cloudy April day, not just at Central Market, but circling back to visit three other retailers with grocery offerings, including a Target Supercenter, a Wal-Mart Sam's Club and Whole Foods.
Consumer choice clearly reigns in the toughest grocery market in America.
In the realm of Wal-Mart "biggest" milestones, this area looms large. While Wal-Mart scaled to the No. 1 position in U.S. grocery industry on the back of its stranglehold on rural America, it leads the food category in only one top 10 urban market: Dallas/Fort Worth.
The battle here is brutal, arguably irrational, but absolutely unavoidable. That's because for the national chains aiming to survive Wal-Mart's relentless grab for an ever-increasing share of the $500 billion grocery pie, Dallas/Fort Worth symbolizes a last stand. Not only does the behemoth dominate here with a commanding 21.9% share, but the remainder of the market is oversaturated with food stores-more than 1,100 in a region of about 5.5 million people.
"It is probably the most competitive market in the United States," said Paul Gannon, chief marketing officer at Albertson's, which operates 102 stores in Dallas/Fort Worth and is No. 2 in the market to Wal-Mart.
Inevitably, there will be a weeding out. "There are far too many chains and some of them have to go," said David Rogers, president of DSR Marketing Systems, a Chicago-based retail research firm.
But bow out here and Wall Street, suppliers and rivals begin to question if you've got enough fight to survive the war. And then just try bolstering stock price, luring talent, landing favorable real estate and supplier deals outside Dallas when everyone thinks your brand is destined to be the next Wal-Mart casualty.
"A rational person would look at this market and say this is the last place to open new stores. But this is a huge market and you can't ignore it," said Al Meyers, senior VP of the Dallas office of Retail Forward, a Columbus-based retail consulting firm. "If you can't figure it out in Dallas, what makes you think the second, or third or fourth big city where you have to fight Wal-Mart will be any easier?"
OPTIONS, OPTIONS, OPTIONS
So the fight rages on, giving consumers like Ms. Zumwalt a plethora of shopping options within 10-minute drive. In planning her monthly $500 food budget, she makes lists not just of items, but by store. Target Supercenter is the place for laundry detergent and toilet paper; at Whole Foods she buys baba ghanouj and organic veggies. Her one-stop shop when rushed: traditional middle market players like Kroger, Tom Thumb (a Safeway brand) and Albertson's. During her trip to Central Market she spent $48.29, almost entirely on produce.
Ms. Zumwalt's fickle shopping patterns surely foil the best laid brand-building advertising plans of the middle-market players. Despite Safeway spending $5.4 million in the market last year-$2.9 million in ads at the Dallas Morning News alone-the Safeway banner will never be health-conscious Ms. Zumwalt's favorite store. "The produce there is just so sad. Sometimes I have to dig to the bottom just to get a decent apple," she says, pointing to an entire wall of flawless ripe apples at Central Market.
Central Market has won her loyalty despite spending only about $1 million in newspaper advertising, while another of her favorite stores, Whole Foods, spends virtually nothing on newspaper advertising-a measly $15,000 in the Dallas-Morning News last year.
The necessity of shifting ad spending out of newspapers to branding is not lost on Albertson's Mr. Gannon. In December 2004, the 2,500-store chain launched its "Check the Price" program, which lowers prices on items purchased most by customers in an effort to end the promotional pricing cycle, "so there's less reliance on the weekly circular," he said, adding: "We think, over time, this will allow us to better appeal to more customer segments and also reduce print spending."
For its branding effort, it has linked up with Patricia Heaton, star of "Everybody Loves Raymond," to be spokesperson for its campaign message "Helping make your life easier" from Duncan & Associates, Dallas.
For now, though, print spending remains stable and the chain's biggest ad expenditure. Compare that to Wal-Mart, which spends $3.6 million of its almost $5 million budget here on spot TV.
In such a saturated market, it's hard to stand out, even with a branding effort. Kroger is never going to be as upscale as an H.E. Butt Central Market and never as cheap as a Wal-Mart. So what can it be? In the rush to differentiate, parity is the new problem.
"This is the kind of business where it's very easy to see what your competitors are doing and copy it," said Stephen Hoch, professor of marketing at the University of Pennsylvania, who has spent decades studying supermarket chains. "Everyone's best store looks like everyone's best store."
Loyalty-card programs. Store-brand programs. One-stop shopping. Organic produce sections. They've all got `em.
Add to that the failure to shake old habits, it's a seemingly intractable dilemma with no easy answers. Retailers have "grown up for 40 years with the same business model-let's forget the customers, what's important is the deal we get from the manufacturers and they just can't change," he said.
Of course, Wal-Mart's whole business model is based on passing that savings down to consumers like Steve and Lori McNeeley, who have $300 to spend on groceries a month and three children to feed. Despite two Albertson's, a Tom Thumb, a Kroger and a Whole Foods closer to their Dallas/Fort Worth area home, the family drove to a Wal-Mart Neighborhood Market instead.
Loading a shopping cart full of groceries into his car trunk, Mr. McNeeley, an aircraft mechanic, said, "We like Wal-Mart a whole lot. The prices are good and we get so much here."
And if the competitors he snubs eventually leave town?
"If [Wal-Mart] gets bigger, it just means we get more selection and cheaper prices."