Delaware is one of the fastest-growing states in the country. According to U.S. Census Bureau, the population of The First State increased 10.2 percent from 2010 to 2020. And, current estimates show the number of people moving to the state has continued to climb in the past three years.
People are coming to Delaware for a number of reasons, chief among them low taxes, affordable housing, a strong job market and its proximity to nearby urban financial centers.
Given that Delaware’s economy is healthy, strong and known for its business-friendliness and its population is growing makes the state an excellent place for grocery companies (as well as other industries) to locate and expand, noted Susan Coulby, senior manager, communications for the Delaware Prosperity Partnership.
Market in transition
With a median household income hovering around $80,000, residents collectively spent about $3.9 billion at Delaware’s some 265 supermarkets and grocery stores throughout 2023.
Of that total, Food Lion is well represented in the state with 20 locations, Albertson’s has 18, including three Safeways and 15 Acmes, and Kroger has two locations, both of which are Harris Teeters.
Lidl, Aldi, Sprouts and Weis Markets are among the grocers that have been growing their presence in Delaware in recent years.
Given the combined presence Kroger and Albertsons have in the state, talk of their proposed merger has some officials in Delaware concerned about what the ramifications could be on the state’s residents, especially if stores close.
State Treasurer Colleen Davis has expressed her uneasiness with the proposed merger and noted that underserved communities in Delaware could be adversely impacted if the deal were to be approved.
She also expressed concerns that the merger could lead to higher grocery prices. “If prices rise in these stores, it could push lower-income families to transition to discount variety stores to purchase their groceries, which is not a good alternative,” she said.
Last August, Davis was among six U.S. state officials who called on the Federal Trade Commission to oppose the merger and safeguard the long-term economic security of her constituents and Delaware.
“Beyond the potential harm to workers’ wallets and livelihoods, more consolidation of America’s largest grocery chains could have severe health implications on our communities,” Davis said.
“It could also mean more food deserts across our state and less accessible prescription medications. Both of these effects would intensify existing health disparities, especially for folks already struggling to make ends meet.”
Davis noted that certain areas of Delaware are in desperate need for more grocery stores. Upon reviewing recent data, Davis said more than half of Delawareans (60 percent) live in census tracts with no grocery store, and 27 percent live in census tracts with just one store.
“Anecdotally, Delaware is experiencing acute food deserts within the city of Wilmington, where only three to four grocery stores are within a five-minute drive of more than 70,000 residents,” Davis said. “We’re also seeing issues in the more rural parts of the state, such as western Kent County and southern Sussex County.”
Other issues loom
Among the issues impacting Delaware retailers is the minimum wage increase that went into effect Jan. 1, according to Julie Miro Wenger, executive director of the Delaware Food Industry Council.
“This comes during a period when many of our retailers are still feeling the effects of supply chain issues and food inflation costs,” Wenger said.
At the same time, she added that retailers continue to face labor issues in the state. “It is a real struggle to find people willing to work in many sectors, retail included.”
Wenger pointed out that retail theft has also been a chief concern. “One issue that continues to plague retailers in Delaware is organized retail crime. We have seen considerable increases throughout the state, but the northernmost county has increased the most,” she said.
Changes afloat
Delaware has seen a flurry of retail activity in the past few months. Giant Food pared down the number of delivery fulfillment centers it operates in the Mid-Atlantic region and last fall announced it would be closing its Milford location.
Considered one of the company’s smaller facilities, the site was built to help Giant serve its grocery delivery business, Giant Delivers. Company officials stated that the closure was necessary due to changing delivery needs.
Giant’s delivery service had been around since 2019 but hadn’t seen much competition in Delaware until COVID-19 hit. As new delivery models were introduced, the company found itself needing to made some adjustments to offer more competitive options.
Jonathan Arons, community relations manager with Giant Food, said the company is making several changes to its operating structure in response to the increasing demand for improved delivery service.
Calling delivery “an integral part of the company’s omni-growth strategy,” Arons said Giant’s move toward implementing a local fulfillment model would better meet evolving consumer needs “We are pleased to announce updates to our home delivery service to meet the changing needs of our customers for faster delivery, more delivery timeslots and a broader assortment,” he said.
“We recently consolidated our Giant Delivers business out of our newly opened Manassas, Virginia, e-commerce fulfillment center and in the Delaware market and launched a localized picked-from-store model using our Giant associates, as well as continue to partner with third-party providers on faster delivery,” Arons said.
In January, Aldi revealed its plans to expand in the state. Its newest location will be in Newcastle’s Concord Pike area, a well-traveled route near the Pennsylvania border. Aldi signed a 10-year lease for this location, which was a former Ashley Furniture store.
It will make the 10th Delaware location for the German discount supermarket chain. Aldi opened its last stores in the state the year before, one in Milford Plaza and the other in Millsboro Peninsula Crossing.
The 33,000-square-foot-building is substantially larger than Aldi’s typical store formats, and given that it recently acquired hundreds of Winn-Dixie and Harveys Supermarkets, some are wondering if Aldi plans to use a portion of the square footage for its store and sublet the remaining space for warehousing or shipping. It would would make sense if the company decides to convert some of those Winn-Dixies into Aldi stores.
Meanwhile, near the end of 2023, Downtown Dover Partnership announced a redevelopment project was in the works for 120 S. Governors Ave. The multi-use project calls for four floors of apartments, a two-story parking garage and the potential for a grocery store.
The site formally housed an Acme and the DDP is optimistic that another grocery store could be built in the same spot. DDP officials said this would be much needed good news for low-income residents in downtown Dover who are without a food store. And some 12 percent don’t own a vehicle to drive to the next closest store several miles away.
Sprouts Farmers Market is set to open its second store in the state. It will be located in Middletown’s new Northside Shopping Center and is expected to debut in 2025. The store will feature Sprouts’ open layout design and focus on fresh produce and a large assortment of organic, gluten-free and plant-based foods.
The Middletown area will also be getting a new Weis Markets at the Bayberry Town Center plaza. The 64,000-square-foot store, which is scheduled to open in 2025, will mark the fourth Weis in Delaware and feature a gas station.
The retail complex is located in one of Delaware’s fastest growing residential areas and is said to be the largest grocery-anchored center in the Middletown-Odessa-Townsend area (MOT) in southern New Castle county.
Agile Cold Storage is building a 275,000-square-foot facility in Claymont. The company specializes in blast freezing, layer/case picking, cross docking, export services, tempering and e-commerce. The $170 million facility is expected to be completed this summer and will employee about 130 workers.
The creation of an automated, multi-temperature warehouse in Delaware enables Agile Cold to expand into the Mid-Atlantic and Northeast markets and help retailers meet the increasing demand for fresh, refrigerated and frozen foods with more frequent deliveries.
In response to the news, Gov. John Carney has said the project “will build on Delaware’s strong foundation in food manufacturing and transportation, helping our region’s supply chain prosper.”
Byler’s Store, country market and grocery outlet store with two locations in Delaware, is building a 37,000-square-foot bakery and warehouse in the Garrison Oak Business & Technology Center in Dover.
Operating since 1974, Byler’s stores feature a large variety of bulk and health foods, produce, deli meats and cheeses, fresh baked pies and breads and outlet groceries. Its Dover location also features a kitchen and gift shop.
Read more market profiles from The Shelby Report.
