Neighborhood vibes keep smaller grocers afloat as chains battle for supremacy

Some people want to shop where everybody knows their name.

“I see some people three or four times a week,” said Gene Tommasi, who runs Golden Dawn grocery store in New Kensington. “It’s a little like ‘Cheers,’ ” he said, referring to the TV show about regulars at a bar in Boston.

It’s been nearly a year since Tommasi and his business partner, Jim Faccenda, took ownership of the 60-year-old market on Freeport Road. The 25,000-square-foot grocery with a bakery, deli and meat department underwent a facelift in that time: reorganization, new paint and new equipment.

For neighborhood grocers, the daily grind is a David-vs.-Goliath struggle. Smaller shops such as Tommasi’s are fighting to retain a customer base against larger outfits from Walmart to Giant Eagle to Aldi. They are doing so by appealing to shoppers’ sense of community.

“A lot of people don’t want to be in big stores,” Tommasi said. “It serves the community, and the community supports it. We can bring them a store that’s clean, fresh, with weekly ads, and they can do the full shopping experience.”

Stiff competition

Walmart, one of the largest global retailers, has been taking a bigger piece of the shopping cart, capturing 25.6% of the regional market in 2021, according to data from Chain Store Guide, an industry analytics firm. The third-largest share of the local market goes to Walmart’s membership-based warehouse chain, Sam’s Club, at nearly 10% of the market.

Holding firmly at second is O’Hara-based Giant Eagle with 21.4%, according to the data tracking Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties.

Meanwhile, other national names such as Trader Joe’s, Whole Foods, Aldi and several dollar store chains have been moving into the region, while big boxes such as Target are expanding their grocery offerings.

The national corporations have competitive advantages.

“You can purchase at large volumes and pass those savings on to the consumers,” said Chedly Louis, a vice president at Moody’s Investors Service.

But smaller grocers such as Shop ’n Save, with more than 90 independently owned and operated stores in Western Pennsylvania, Maryland, New York, Ohio and West Virginia, and Kuhn’s Market, a neighborhood staple with eight locations in the area, have cards to play.

Convenient or walkable locations and access to public transportation are important. And there’s their role in the neighborhood.

“The actual connection to the community is a differentiator for a regional player,” said John Clear of Alvarez & Marsal Consumer and Retail Group. “It can be in an old-school kind of way, where employees at that store may have worked there for 30 years. They’re literally part of the community — the store manager is a coach for one of the local teams. A lot of the successful regional players lean into that.”

‘They listen to the customers’

Audrey and Rich Bartoski of Cheswick like to shop small when it comes to food, preferring to patronize independent grocers.

“We won’t go to Walmart. I don’t like how they operate. They’re too big,” Audrey Bartoski said. “We like the small stores with good customer service.”

Nick Kohley of Saxonburg prefers to shop at Sprankle’s Neighborhood Market on West Water Street because of the friendly atmosphere.

“The employees are there to help and, if there’s something I can’t find, they’ll actually start stocking things that you asked for,” Kohley said. “They listen to the customers.”

Though he occasionally buys bulk items at Sam’s Club, Kohley leans toward the locally owned store. Sprankle’s also has locations in Leechburg and Kittanning.

“I’ll support local businesses over corporate stuff any day of the week, so I’ll pay the extra dollar to some people who have a local place,” he said.

Amber Acquavita of Saxonburg said the Sprankle’s location is too convenient to pass up.

“I live a couple minutes away,” she said. “And they have really good sales.”

Last week, she loaded packs of soft drinks into the trunk, noting, “These were four for $13, and my son drinks Sprite like there’s no tomorrow.”

Acquavita said she lets sales be her guide when choosing where to shop — from Sprankle’s to Giant Eagle, Walmart or Sam’s Club. “We’re a family of four. Sometimes it’s easier just buying a huge bulk of things,” she said.

Officials at Sprankle’s did not return calls seeking comment.

Customer service

Tom Charley said his Charley Family Shop ’n Save stores in Greensburg and Murrysville don’t have the income statements of a behemoth such as Walmart or deep discounter like Aldi. But, Charley said, one advantage his stores have is “vastly superior” customer service from employees who have been involved with the company for years and specialize in their departments.

“It’s about the experience our teams have, the longevity of the management staff, the offerings that we have that those places can’t compete with,” Charley said.

Charley pointed to the in-house bakery, where “a significant portion of our products are made from scratch rather than arriving frozen,” and the meat department, where butchers are trained “to know how to cut a chuck roast or a strip steak or butterfly a pork chop. A lot of places just press an order, and it comes prepackaged.”

The flexibility to work with smaller, local vendors is another key for community grocers, said Clear of Alvarez & Marsal.

“Working with local producers who don’t make a ton of product — it might be hard for them to get into a Kroger or Albertsons, but it works really well for smaller chains that can allow their store managers more leeway to work directly with them to get local production that highlights that connection to the community.”

And regional players can be more nimble to respond to changing markets and new developments than some bigger players who have more moving parts to consider.

It’s easier to test out new technology as a regional player, Clear said, because the network of stores isn’t as big.

“For a Walmart or Kroger, they have to think about this massive, national rollout, and they might not move as quickly,” Clear said.

Charley of Shop ’n Save said being able to coordinate easily between his stores means they can be quick on promotions and work easily with vendors.

Recently, Charley got a good buy on baby back ribs.

“I can go online on social media the next day and let people know, whereas these massive brands are buying for thousands of stores and don’t have the ability to be as nimble as us in the promotions,” he said.

In addition to running “aggressive weekly ads,” Howard Rosenberg, owner of Community Supermarket, said being smaller allows the stores to respond to the market more quickly than corporate chains.

He pointed to when eggs skyrocketed in price.

“When the market came down, we were able to react,” Rosenberg said. “We had them for $2.99, and we sold a ton.”

Ed Nowikowski frequents the Community Supermarket in the Heights Plaza Shopping Center in Harrison a few times a week. Founded 90 years ago, the company has other locations in Penn Hills, Lower Burrell and Bloomfield in Pittsburgh.

“I look at the prices in the flyers that come in,” said Nowikowski, of Harrison. “The people are very nice. I know some of them by name.”

Golden Dawn’s Tommasi said the local connection is critical.

“You can’t give everyone everything they want — you do the best you can with out-of-stocks. Prices are still higher than what they were. But we try to compete with customer service,” he said. “No matter what size store you have, if you’re fair to people and treat them with respect, they’re going to respect you, and they’ll continue to shop.”

Staff writer Joyce Hanz contributed to this report.