DJL Research In The News

David J. Livingston is a panelist for the Retail Wire Brain Trust and his comments are published frequently.

He is an authority on the supermarket industry who is often quoted in the business press.

News articles for April–June 2004

Wal-Mart forces grocers to scramble
JSOnline, Milwaukee, June 19, 2004

The coming industry shakeout will probably close some supermarkets, including some with union employees whose health insurance benefits are superior to what Wal-Mart provides.

"There is only room on the bus for so many people," said Pewaukee supermarket consultant David Livingston, "and when a big fat guy like Wal-Mart gets on, two little guys have to get off."

Poorer areas hungry for supermarkets
Chicago Tribune, June 6, 2004
"The poor pay more," said David Livingston, head of DJL Research, a Wisconsin-based retail consultant.

Big chains buy in huge volume, which allows them to squeeze the lowest prices from their suppliers, and then pass those lower costs on to customers. . . .

"They're typically gonna go where there's room for population growth and more affluence," says Livingston, the retail consultant.

If they were willing to tweak the giant-store-with-a-giant-parking-lot format that they use in outlying areas, he contends, the major food chains could probably turn a profit in lower-income urban settings. But that would require innovative thinking, he says, and "it's easier just to not go to the inner city."

Riley quits as head of Rainbow
Star Tribune, Minneapollis, June 4, 2004
Twin Cities shoppers never took to the "new" Rainbow Foods, Livingston said. Roundy's alienated consumers by eliminating Rainbow's loyalty card program and "cramming Roundy's private label [products] down their throats," he said.

In the end, though, the competition is proving too much for Rainbow, Livingston said.

Expert: Windsor can't handle three grocery stores
Windsor Tribune, Windsor, Colorado, June 3, 2004

Windsor’s population of 14,045 is just not big enough to support three full-size grocery stores, according to a retail grocery business expert. With plans for a Wal-Mart supercenter with a full-size grocery store steaming ahead, either King Soopers or Safeway will not be able to compete. One will have to close, the consultant said. “Wal-Mart is absolutely counting on one of them going out of business,” said David Livingston, a retail grocery business consultant. “Wal-Mart is making that assumption going in. They know someone’s going to have to go, and they know it won’t be them.”

Chief of Roundy's struggling Minnesota stores resigns
The Business Journal of Milwaukee, June 3, 2004
Rainbow's same-store sales fell 6.4 percent from 2001 to early 2004, according to DJL Research, a Pewaukee grocery consulting firm.

"It's going to be awfully difficult for Roundy's to get any kind of market share improvement," said David Livingston, DJL's managing partner. "Maybe if they get God to run the division they can see improvement."

Nash Finch closing grocery stores
Pioneer Press, St. Paul, MN, May 20, 2004
Those stores have come under fierce competition from new Wal-Mart and Target super centers, which carry full grocery lines, and from other retailers, said retail industry consultant David Livingston of DJL Research in Milwaukee.

Livingston also said he was not surprised by Nash Finch's decision to close or sell its Avanza stores, which are Hispanic- themed supermarkets the company was developing in Colorado and had expanded to Chicago.

One of two Chicago stores, he noted, has a Mexican theme but was in a Puerto Rican neighborhood. What's more, Livingston estimated that only 15 percent of the store's merchandise was of Hispanic origin or served Hispanic customers.

"They were really an EconoFoods store with Hispanic music soundtracks," he said.

Trader Joe's seeks grocery sites in Milwaukee
The Business Journal of Milwaukee, May 17, 2004
"You could probably put two or three Trader Joe's in the Milwaukee area, and they would do fine," said David Livingston, managing partner of DJL Research, a Pewaukee grocery consulting firm.

Livingston said the stores could fare well in the Elm Grove/Brookfield area, north shore, or Milwaukee's east side. Livingston said the local upscale Sendik's stores offer a fuller line of groceries than Trader Joe's.

Fast-growing Lakeville pegged for new Roundy's store
The Business Journal, Milwaukee, April 30, 2004
Rainbow stores have continued to lose market share in the months since Roundy's acquired them from Lewisville, Texas-based Fleming Cos. Inc., according to research provided by Pewaukee, Wis.-based DJL Research.

Until it gets the existing stores turned around, it doesn't make sense for the chain to open a lot of stores, said David Livingston, a managing partner for the research firm.

"Does this [growth] make good financial sense right now? Probably not," he said.

However, the company also needs to remind consumers and developers that it is out there. "This is more of a psychological move," he said. "They don't want developers to just forget about them."

Grocery chain to cut 10,000 jobs
South Florida Sun-Sentinel, May 1, 2004
In 2001, David Livingston, a retail expert from Pewaukee, Wis., compared Fort Lauderdale-area Winn-Dixie and Publix stores. He found that the 10 Winn-Dixie stores he studied averaged sales of less than $300,000 per week, compared to a weekly average of about $600,000 at nine Publix stores. He said he doubts much has changed and predicts eventual bankruptcy for the chain.

"I don't know how they are going to hang on," he said. Meanwhile, he said, employee-owned Publix has the advantage over publicly traded Winn-Dixie, which must respond to shareholders. And Wal-Mart's influence is bound to grow.

"One thing we do know is that Wal-Mart is not going to be backing down from their advancement and Winn-Dixie is like a deer caught in the headlights," he said.

A&P's sales up for 2003, but company still in red
The Daily Oakland Press, Pontiac, Michigan, May 1, 2004
"I really don't think they're ever going to turn that company around," said David Livingston, founder of DJL Research, a market research firm in Pewaukee, Wis. "...The U.S. competition is too overwhelming for them."

In the Detroit market, Farmer Jack faces tough competition from Meijer and Kroger, he said. And as Wal-Mart Supercenters encroach, both Farmer Jack and Food Basics will struggle to compete against the ultra-low discounter. "They're too slow to react to change," he said.

In addition, he added that A&P is constantly reinventing itself but failing to achieve its objectives.

Winn-Dixie will drop 156 stores: No word if local stores will be affected
Times-Picayune, New Orleans, May 1, 2004
David Livingston, managing partner of DJL Research in Pewaukee, Wis., said Winn-Dixie's poorest-performing stores in Louisiana are in rural areas where the stores compete with Wal-Mart. "Winn-Dixie in New Orleans has relatively good locations," he said.

Leeann Chin goes over to the Rainbow
Supermarket News, May 3, 2004
One observer familiar with Twin Cities food retailing told SN he believes the Leeann Chin deal is likely to help the Rainbow chain's image.

"It will bring them up a notch with consumers," said David Livingston, managing partner with DJL Research, also in Pewaukee.

In the meantime, shoppers who are loyal to Lunds and Byerly's can count on the company partnering with a high-quality operator to replace Leeann Chin, he added. "Lunds has very high standards," Livingston said. "They're not going to accept anything mediocre."

N.O. tough market for grocer
The Times-Picayune, New Orleans, April 25, 2004
Livingston said the New Orleans area grocery market is challenging on several fronts: First, it's unusual to see three regional public chains go head-to-head in one market, but that's what dominant player Winn-Dixie Stores Inc., Sav-A-Center, a division of the Great Atlantic & Pacific Tea Co., and Albertson's are doing.

What's more, New Orleans has a powerful bloc of independent neighborhood grocers with loyal clientele..."Some of them have got cult-like followings," Livingston said, and provide "high quality and service" and are "among the best independents in the country."

Twin Cities' shoppers slow to embrace Roundy's Rainbow stores
The Business Journal, Milwaukee, April 23, 2004
David Livingston, managing partner of DJL Research, doubts Rainbow will ever achieve 20 percent market share after having the highest market share among Twin Cities grocers at one time. "This could be a retail Vietnam for them," Livingston said of Roundy's Minnesota entry.

Wal-Mart plans Hartford Supercenter
JSOnline, Milwaukee, April 23, 2004
Wal-Mart has a pattern of opening stores near successful Kmarts in an effort to knock them out of business, Livingston said. He said...either the County Market or Sentry store in Hartford will probably not survive once the superstore opens. He said Wal-Mart uses its enormous buying power with vendors and its efficient logistics system to greatly under-price its competitors.

Taking issue with Wal-Mart opponents
Opinion: Guest Comment—The Business Journal, Milwaukee, April 16, 2004
I agree that Wal-Mart certainly contributes to the folding of many businesses. However, in my opinion those businesses were poorly operated to begin with and deserved to close...Wal-Mart makes good retailers better and improves our standard of living. Keeping Wal-Mart out of a community in order to artificially keep mediocre businesses from closing is costly to consumers and does not encourage retail ingenuity.

Supervalu's cheap trick
Star Tribune, Minneapolis, April 15, 2004
David Livingston, founder of DJL Research LLC, a consulting firm in Milwaukee, said Save-A-Lot franchises help smaller regional chains to "recycle real estate." Because of Save-A-Lot's small size, these chains can open franchises in locations once occupied by unprofitable stores, he said.

Supermarkets in transition
Baltimore Sun, April 5, 2004
“This publicly held supermarket model is going to get squeezed out,” said David Livingston, managing partner of DJL Research, a consulting firm based in Pewaukee, Wis. “Probably over the next 10 years, you're going to see some big changes, a lot more exits out of the market.”

“Most analysts will evaluate the competition using either a microscope or telescope. I use a proctoscope.”

— David J. Livingston