Many chains did collapse -- 26 filed for bankruptcy this decade, unable to match the falling prices of their better-run rivals -- and a wave of consolidation swept the business.

But the survivors rallied by redesigning stores, introducing a more relaxed shopping experience and marrying low-priced staples with higher-margin breads, meats and wine. Now, the stronger chains like Kroger Co. and SuperValu are taking market share from weaker, often regional, grocers.

Supermarkets have begun to attract new investment from those sensing a sustainable edge. Hedge fund Cerberus Capital Management recently joined two retailers in acquiring Albertson's, a Boise, Idaho, chain, and Britain's Tesco is expected to begin rolling out 100 U.S. stores in the Southwest later this year.

Great Atlantic & Pacific Tea Co., once a symbol of the big chains' decline, recently acquired rival Pathmark Stores for $700 million.
Last year, buyout fund Sun Capital Partners bought Indianapolis-based Marsh Supermarkets.

Many of the chains still are learning to sidestep Wal-Mart. They are cutting back on drugs and health and beauty products, which are Wal-Mart strengths, to stress fresh produce, higher-quality meat and easy-to-prepare foods. Subdued lighting and high-end selections also help distinguish them.

Supermarkets now understand "they can't put cookie-cutter stores out there anymore," says Sandra J. Skrovan, a senior vice president at TNS Retail Forward.

Scott Frondorf, a Green Township, Ohio, software executive, and his wife now do more of their food shopping at a local Kroger store that offers expanded produce and "boutique-like" seafood, cheese and wine. The couple still shops occasionally at a huge warehouse market, but "momentum is definitely in the Kroger direction," he said.

David B. Dillon, Kroger's chief executive, estimates that the Cincinnati-based chain gained share last year in 26 of the 32 areas where it competes directly against Wal-Mart supercenters.