Giant Eagle nails down co-location deal with Ace Hardware
Giant Eagle and Ace Hardware have reached an agreement that will install hardware outlets inside four of the grocer's locations in Pennsylvania, according to the Pittsburgh Post-Gazette.
The hardware outlets will open at Pittsburgh-area locations in North Huntingdon, Allegheny Township, Ross Township and Shaler. Store remodels will begin soon, with the first location ready for business this summer, Giant Eagle estimates.
"It is imperative that we at Giant Eagle continue to innovate both within and outside of our supermarkets to succeed in our increasingly competitive food retail environment," Dan Donovan, a company spokesman, said in a statement. "Ace's experience with store-within-a-store concepts at other retailers and shared commitment to quality, service, and convenience make them a natural fit for Giant Eagle."
Established in 1931, the privately held and family-owned Giant Eagle has nearly 400 retail store locations in Pennsylvania, Ohio, West Virginia and Maryland, and about $8.9 billion in yearly sales. The company has experienced many of the same competitive pressures as other retail chains, pushing sales down by more than 10% during the past four years, the Post-Gazette reported.
Differentiating itself from the competition is key, and Giant Eagle has succeeded through its generous gas loyalty program and may do the same through this tie-up with Ace Hardware. Plenty of handy consumers and others looking for tools and home repair or remodeling supplies would appreciate being able to shop for those items on the same trip to get groceries.
Ace Hardware, a growing brand that claims to be "the world’s largest retailer-owned hardware cooperative," has been gaining traction from the retail grocery segment. The Illinois-based company has both store-within-a-store locations and storefronts next door to, among others, Buehler's, Coborn's, Mollie Stone's, Niemann Foods and Ramey Supermarkets, and it was recently rumored to be in talks with Kroger Co. to co-locate inside some of that retail chain's outlets.
Ace sees annual revenue of more than $5 billion, and reported $1.34 billion in revenue in the third quarter of 2017, up 9.1% from the year-ago period.
It's difficult to see any downside to this partnership. Ace gets additional retail locations for its products, while Giant Eagle gets to offer its customers a variety of handy hardware items. It might be a bit odd for shoppers to see power saws within hailing distance of the fresh produce area, but that proximity has been on display for years at Walmart superstores and other large retailers, where light bulbs, kitchen supplies and car care products are often right around the corner from beverages and snacks.
To succeed, it will be important for both parties to promote the partnership and to effectively cross-promote products — such as breads and knives, or maybe meat department specials and outdoor grills. Smaller, more accessible hardware stores are reportedly riding a wave of popularity these days, especially those offering customer service with a personal touch and helpful guidance and advice to the DIY crowd. It's pretty hard for Costco or Walmart to compete with that, particularly when their deals are spread over miles of aisles.
- Winsight Grocery Business Giant Eagle Hammers Out 4-Store Deal With Ace Hardware
- Valley News Dispatch Giant Eagle to host Ace Hardware in Allegheny Township, North Huntingdon, Ross, Shaler
- Pittsburgh Post-Gazette Eggs, bread and wallpaper? Giant Eagle to host Ace Hardware in four stores