Last updated on December 12th, 2024
by Diana Leza Sheehan
Within the grocery sector in the U.S., the Southeast stands out with its distinctive characteristics. Influenced by local tastes, strong community bonds and the significant presence of Publix, this region’s grocery landscape is unique.
Including some 11 states, the Southeast region accounts for 25 percent of the U.S. population – about 85 million people – and continues to grow. The region is the largest in the country by population. Growth is occurring in states throughout the region, particularly in well-established metro areas such as Atlanta, Charlotte and Jacksonville.
Florida has been the star of the region, with tremendous growth year over year. Recently, the third most populous state in the country was also its fastest growing. According to the U.S. Census Bureau, the region accounted for nine of the 10 fastest growing U.S. metropolitan areas in 2023.
In the Southeast, we continue to see a large Black population that is different from those found in other regions. In fact, more than 30 percent of the population in Alabama, Georgia, Louisiana and Mississippi identifies as Black, according to the latest U.S. Census data.
In Florida, more than one in four residents identify as Latino/Hispanic, with that population also posting strong growth in Georgia, North Carolina and South Carolina and Louisiana.
On average, Southeast residents are less likely to have a four-year college degree. We also see that in most southeastern states, residents are significantly more likely to live at or below the poverty line.
As we see in other regions, the suburban and rural population density in this region, paired with varied diversity of the population and how widely it changes from state to state and city to suburb creates interesting opportunities and challenges for national grocery retailers. However, it opens the door to independents that operate in these markets and suggests opportunity for grocers focused on a price-based value strategy.
Publix, Aldi, Piggly Wiggly and more
Throughout the Southeast, national players such as Walmart, Aldi and Kroger continue to see success. However, the region is much more about its extraordinary regional independents.
With more than 1,300 stores throughout the Southeast, Publix is the largest employee-owned grocery retailer. The company has focused on being the premier local grocer in the Southeast for decades. Its focus on worker well-being has fostered a sense of community within its stores, making them beloved local institutions.
Publix’s success relies on several strategies. Its focus on perimeter departments, particularly the bakery and deli section, resonates with consumers. Offering a strong private label portfolio is another way to focus on offering competitive price alternatives. The company’s strategic locations and commitment to clean stores help solidify its position as the go-to grocer for local consumers.
Ahold/Delhaize’s Food Lion continues to thrive in the region. It has been investing in stores and customer experience through hundreds of renovations over the last few years. The banner leans into fresh and local products with a specific eye on affordability as well. Private label is an important aspect of Food Lion’s strategy, ensuring it offers value to shoppers in a number of different ways.
In March, German discount grocer Aldi completed its acquisition of Southeastern Grocers, the parent company of Winn-Dixie and Harveys stores. This move reinforced Aldi’s intent to grow across the country but also heavily in the Southeast region.
Aldi’s appeal lies in its focus on efficiency and value. The company’s limited-selection, private-label-heavy approach allows it to offer lower prices on everyday essentials. This strategy caters to low-income shoppers, a demographic with a significant presence in the Southeast.
However, Aldi also recognizes the power of the Winn-Dixie and Harveys banners it now owns. While the retailer has been clear that some locations will be converted to Aldi in the coming years, it also intends to keep a retail presence in the market under both of the legacy banners. This will be an ongoing evolution to keep an eye on for both local retailers and manufacturers.
While Aldi generates more than 90 percent of its sales through private label, this experiment in the Southeast creates a path for the retailer to explore stronger relationships with national and regional brands.
Beyond the dominance of Publix and national chains, the Southeast boasts a vibrant network of independent grocers.
Piggly Wiggly is an iconic, century-old brand that maintains a significant presence in the Southeast. Franchised stores often are found in smaller towns and cities, catering to local preferences and offering a sense of nostalgia.
Louisiana-based Rouses Market is one of the largest and fastest growing family-owned grocers in the country. Stores focus on fresh and local assortment and are embedded in their communities.
Another strong independent player is Ingles, headquartered in Asheville, North Carolina. With some 200 stores in six southeastern states focused on smaller towns and rural communities, Ingles has built a $4 billion dollar business by focusing on the fundamentals.
[RELATED: Taste Of The Southeast: Why The Grocery Landscape Stands Out In This Area]
What shoppers want: Exploring critical consumer themes
Consumer trends in the grocery space tend to be similar throughout the country.
Shoppers continue to lean into natural and organic brands and products. Value is a function of convenience, price and the “X” factor, which is tied specifically to a retailer’s ancillary offers and customer support.
Private label demand is strong across categories and states. The role of digital engagement drives loyalty for shoppers regardless of where they go. And technology – both shopper-facing and behind the scenes to improve operational efficiency – continues to differentiate independent and national retailers.
However, some variations exist from region to region as we look at emerging themes that translate to retailer and brand preferences and consumer preferences. Age, income, race and ethnicity – and access to specialty retailers versus national players across channels – will impact what matters most to consumers.
When looking at the Southeast, consumers prioritize similar things to the average U.S. consumer. According to an August study by PDG Insights, more than half (54 percent) of consumers say they tend to buy the highest quality products that they can afford, yet the same number (54 percent) say they shop where they can get the best prices, even if the shopping experience is lacking.
Though price is such a clear factor in decision making, 55 percent say they would pay more for products that reflect their values, so there are places where brands and retailers can distinguish themselves.
The tension between price, quality and something more is logical when taking into consideration some of the socio-economic nuances of the region’s broader population, who are disproportionately lower income. It also paves the way for strong interest and purchase intent of retailers’ private label offerings.
Nine of 10 consumers buy private label at least occasionally in the region, which translates to at least once a month for most consumers. When asked why they buy private label, 71 percent of shoppers agreed that it provides good value and 52 percent said they would choose one retailer over another based on the quality of their private label portfolio.
Diana Leza Sheehan, CEO of Evanston, Illinois-based PDG Insights, helps emerging brands and retailers make more effective strategic decisions. By leveraging data, she unlocks cost-effective consumer insights to plan retail sales narratives and brand strategies. Her 25-plus year career in the industry across sales, insight and strategy provides a unique perspective for clients.
