The image captured by The Super 50, Supermarket Bu

The image captured by The Super 50, Supermarket Business's detailed listing of the Top 50 supermarket chains in America, is one of an industry on the verge. Caught up in a whirlwind of consolidation for the past few years, it is pausing to catch its breath.

"The industry is in a digestive state. There's been a whole lot of change, and now the guys at the top are struggling to prove to stockholders that the acquisitions they made were good acquisitions," says retail consultant Neil Stern of McMillan.

"But that will change," he continues. "Look at the top three chains on the list. They account for maybe 25 to 33 percent of the industry. In discount stores, the top three account for 75 percent, in drug 45 percent. Supermarkets are still a relatively unconsolidated business."

The Super 50, compiled for Supermarket Business by sister company Trade Dimensions from its exclusive retail database, lists $2 million-plus supermarket businesses only, ranked by 1999 gross revenue. Warehouse clubs such as Costco and Sam's Club are excluded, for instance, as are non-grocery revenue streams from operations such as Wal-Mart Supercenters or Kroger's Fred Meyer stores. Supermarket Business and Trade Dimensions are both affiliate companies of VNU USA.

Moves made by the Wal-Marts and the warehouse clubs in the coming three years will have plenty to do with the ultimate fates of The Super 50, however. "It's fair to say that Wal-Mart, strictly speaking, is the fifth-largest supermarket chain, but to vendors it is the biggest customer. It is the most powerful, most unified presence in the industry," says Stern.

The Top 10 is composed of definite groupings. "Companies one through four all had major merger activity, while five through seven got big by building their own new stores," notes Trade Dimensions president Hal Clark.

Delhaize America's proposed merger of No. 8 Food Lion with No. 17 Hannaford Brothers would put the combined company at No. 6, but that deal was in proposal stages when this list was being finalized.

Filling out the rest of the Top 20 are a mixed lot of wholesaler-owned store networks, including Supervalu and Fleming, military commissaries, and strong regional players such as Meijer and Hy-Vee.

Few industry observers expect The Super 50 to look the same within three years.

"Down the road there will be eight big players," predicts Jonathon Ziegler, senior analyst for Deutsche Banc Alex Brown in San Francisco. He sees H-E-B and Publix being among them, still as privately run companies.

He also thinks the average consumer in the marketplace won't note much change since acquiring chains will, for the most part, retain the banners and formats that already work at the local level. "In most cases, chains would be stupid if they didn't keep the local banners," says Ziegler. "There are exceptions. If Safeway buys Winn-Dixie, it might change over some stores. But if it buys Publix, it wouldn't happen."

That's because, according to Clark, successful food retailing still comes down to how individual stores treat individual customers, no matter who owns whom. "The demise of independents has been talked about for 30 years, but if you look at the second 25 of The Super 50, you'll see the independents aren't demising."

Clark points out that the ratio of chain-owned to independent stores hasn't much changed for the past 10 years, holding steady in the area of about 60:40. "It needs to be pointed out that the independents on this list are mostly great merchants who carve out great niches in their communities," says Clark. "People point to the big chains as more efficient operators, but if you study this list and compare them with independents in the area of revenue in relation to number of employees and checkouts, you'll find indies that are pretty damn good operators."

Retail guru Burt Flickinger III, managing director of Reach Marketing in Westport, Conn., agrees, hailing Meijer, Hy-Vee, Wegmans, and H-E-B as stars in the food retailing universe that will endure through the next phase of consolidation. But, he says, "It's going to be a world of big box and small box, and not much in between."

Here's the supermarket world according to Flickinger, circa 2003:

? Wal-Mart will dominate, no matter the format.

?Warehouse clubs will extend their influence in food, with Costco and Sam's Club doubling supermarket share.

?The dominant small box player will be Supervalu.

?Other successful wholesalers will be led by Associated Wholesale Grocers and Giant Eagle.

?Wakefern will gain steam as a regional powerhouse, and co-op partners will eventually sell out to a national chain.

?Shaw's will continue to be successful and expand, as will Delhaize if Hannaford Brothers managers are given an active role in the company.

?Winn-Dixie will remain independent and thrive under Al Rowland, if he is given free rein to lead.

?A&P will be greatly challenged to shore up southern operations.

?Pathmark and H-E-B will lead the way in ethnic, urban markets.

?Grand Union, Penn Traffic, and Jitney Jungle will struggle.

? Only two Internet grocers will survive, and they will be combination bricks-and-clicks operators. "Lowes Foods and Schnucks have two of the best operations going right now," says Flickinger.

?The biggest challenge in the next five years will be faced by Albertson's, because its strongest areas of operation in the South and West will be the regions most hotly contested by Wal-Mart.