Save-a-Lot stores closing in WNY

Buffalo, NY (WBEN) Save-A-Lot stores have shuttered in Hamburg, Niagara Falls, Lancaster and at the Broadway Market over the past two years. One retail analyst says don't blame the owner-operators.

Burt Flickinger says Save a Lot was originally a very successful company when it was part of Super Value, owned by Bill Moran, who started it in St. Louis. "It became so popular so quickly that it became a national powerhouse with individual owner operators who are quite capable of sourcing, buying bargains, passing along some of the deepest discounts, and giving the highest volume through Save a Lot stores to cash and credit constrained consumers," says Flickinger. He says in the Buffalo Niagara region, 80% of consumers in the Buffalo Niagara region are cash and credit constrained,. "Save a Lot got bought out by a private equity firm in Canada, and then had other private equity investments. They lost their own distribution center system, which they'd had when they were owned by Supervalu and they outsourced to a number of other suppliers, which added cost, complexity, added the labor costs when trucks were late or short shipped," explains Flickinger.

He says an undercapitalized parent and less volume per store created more inefficiencies, which led to slightly higher prices. "In our store checks in the Rochester, Buffalo, Western New York area, and across America, consumers will change stores for a nickel a unit on a very popular brand, and all the people can save 25 percent and save a lot. People can save 15 percent, and at Trader Joe's, people can save 20 to 25 percent. So advantage all the advantage Trader Joe's," says Flickinger.

He says there are choices for those who still want to save a lot. "There's Lexington Co-op, which runs a great operation for natural and organic. Dash's always does well supporting more of the local and national vendors than Wegmans or any of the others. Dash's runs up to 250 to 300 advertised items on popular brands and signed a contract with Wakefern, the low-cost wholesaler in the entire northeastern corridor, and so Dash is strong and getting stronger," says Flickinger. He says Market in the Square, which also uses Wakeford Shoprite, is also getting stronger.

In the end, says the leaders will gain most of the Save-A-Lot volume, and also anticipates price wars.