Small grocer, Magruder's, wraps it up

Jan. 21, 2013 at 3:02 PM
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ROCKVILLE, Md., Jan. 21 (UPI) -- Maryland grocery chain Magruder's, family owned for generations, is calling it quits, the company said without citing a reason.

"Now is the right time for our family to move on," company Vice President Gary Bortnick said.

Analysts said the company likely was overrun by the massive grocery chains that dominate the industry.

Magruder's has been family owned since its start in 1875, The Washington Post reported Monday. At its peak, it operated 10 stores. This week, the company said it had sold one location, leaving four others and those were also up for sale.

"There is just too much competition to try to take on the big-box stores, because they can kill you on prices and variety. Unless you happen to be in a very unique location, in order to survive I think these small stores are going to have to be specialized," said Geoff Brown, principal at accounting firm Bond Beebe.

Not only is it hard to compete with the purchasing power of chains like Wegmans, but even larger retailers, such as Walmart and Target are jumping into the grocery business.

Some of the smaller upstarts are hanging on. Scott Nash, the founder of Mom's Organic Market, now a chain of 10 stores, said his company was expanding because of its organic food niche and changing habits of shoppers.

"People seem to be making many more shopping visits, going one place for their favorite butcher ... then going somewhere else because they have the best produce," Nash said.

Nonetheless, others say it is tough for a mom-and-pop store to go toe-to-toe with a national chain.

"It's just an outdated model, and its time has come and gone," said Barry Scher, formerly a spokesman for Giant, referring to the family grocer.

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