IN THE TRENCHES: The reality of a changing grocery store business
IN THE TRENCHES: The reality of a changing grocery store business
When someone mentions the name Babe Ruth, we automatically link it to baseball because of the impact he had on the game with his ability to hit home runs.
When something has an impact on someone, it often gives him or her a reason for liking it and maybe even wanting it.
Perhaps it's specific clothing, an attractive automobile model, a style of furniture or even a particular retail outlet. If something has exciting impact, it will draw the attention of consumers.
When you enter a grocery store, are you captivated by something that has impact? When you leave, do you feel good about something in the store that will make you want to return to shop there again?
It's no secret that traditional supermarkets have been losing ground in market share to a new generation of grocery operators in recent years. The conventional stores are now competing against very aggressive discount formats that are showing strong growth, with some predicted to triple sales by 2010.
What's so different about a conventional supermarket anymore? Each has a typical grocery, dairy, meat, seafood, deli, bakery, floral and produce department. Some have a pharmacy or a bank. All are filled with general merchandise and gadgets throughout the store. Most traditional food stores have the same layouts and appearances. The middle aisles, in particular, haven't really changed much in 40 years.
Something else that hasn't changed either is the traditional supermarket weekly fliers, which all basically look alike and send a common message to consumers that they better get the deals fast before the prices go back up the following week. This monotonous format has been used for so long a time that it has now become boring.
Discounters do not rely on weekly ad specials to encourage sales. Their strategy is to keep hammering low prices every day. This format has conditioned consumers into not having to spend their time searching ad fliers for deals or force them to travel around to each store for particular bargain specials.
Grocery chains have been moving far too slowly in answering the challenge set forth by super discounters. Most conventional grocers brag of having great customer service, a large variety, hot foods, organic product, clean stores and other promising claims. But that's all old hat. This just isn't enough anymore. Consumers are turning to food retailers that offer more choices, a greater shopping efficiency, personalized attention and everyday low pricing.
Even though typical grocery store chains are struggling to survive the new food industry trend of discount vehicles, we shouldn't count them out just yet. The stronger of the conventional contenders are turning the pages of the past and moving forward with their own innovative plans to hold onto the shoppers they already have and even recapture some who defected to discounters.
There has been a dramatic move more recently to concentrate merchandising efforts toward the peripheral areas of the supermarket in order to establish the niche to grasp a larger slice of the pie. For example, fresh foods are getting a whole new upscale identity to attract consumers who want healthier and more nutritious fun-loving types of product with a personal touch of service.
One department that has the proven potential for a niche is produce. The produce department has all the ingredients to be the impact leader of the fresh food areas within a store. Fresh fruits and vegetables are naturally low in calories, sending a healthy message to shoppers. The freshness, the colors, the variety, the nutrition and the varying displays all make up an exciting fun department in which consumers enjoy shopping. Produce has the influential power to lead the drive.
Every supermarket chief executive officer and management executive should wake up to the fact that the produce operation is a strong force that could benefit companies from declining any further in the marketplace. If promoted properly, the produce department could be a vital niche needed to draw the interest of shoppers.
However, there has to be a firm commitment by senior management to fully support an aggressive niche program. It can't just be the same old theme on a paper sign reading, "Freshest Produce in Town," while the lettuce is wilting away as a result of the usual labor cutback. Maintaining a fresh produce department takes special care and handling by a full, solid team of people.
It is well known that all food retailers would more than lose the fight if they made a snap-decision to just lower prices as a means of trying to gain back market share.
This strategy only puts a retailer in a very costly catchup phase -- one it couldn't afford.
There must be more of a compelling reason for consumers to want to shop a specific conventional food store these days. One of the better ways to beat a low-pricing theme is to offer better value to shoppers.
Corporate gurus can no longer rely on old-fashioned supermarket traditions. They have to change worn-out philosophies, develop a niche, add value to product, offer great service, put on a new look and maybe even change their banner names.
Food stores have to hit booming home runs in front of shoppers today in order to become the Babe Ruth of supermarkets. Otherwise, there is no way for the common supermarket in today's retail landscape to have a favorable end result.
When something has an impact on someone, it often gives him or her a reason for liking it and maybe even wanting it.
Perhaps it's specific clothing, an attractive automobile model, a style of furniture or even a particular retail outlet. If something has exciting impact, it will draw the attention of consumers.
When you enter a grocery store, are you captivated by something that has impact? When you leave, do you feel good about something in the store that will make you want to return to shop there again?
It's no secret that traditional supermarkets have been losing ground in market share to a new generation of grocery operators in recent years. The conventional stores are now competing against very aggressive discount formats that are showing strong growth, with some predicted to triple sales by 2010.
What's so different about a conventional supermarket anymore? Each has a typical grocery, dairy, meat, seafood, deli, bakery, floral and produce department. Some have a pharmacy or a bank. All are filled with general merchandise and gadgets throughout the store. Most traditional food stores have the same layouts and appearances. The middle aisles, in particular, haven't really changed much in 40 years.
Something else that hasn't changed either is the traditional supermarket weekly fliers, which all basically look alike and send a common message to consumers that they better get the deals fast before the prices go back up the following week. This monotonous format has been used for so long a time that it has now become boring.
Discounters do not rely on weekly ad specials to encourage sales. Their strategy is to keep hammering low prices every day. This format has conditioned consumers into not having to spend their time searching ad fliers for deals or force them to travel around to each store for particular bargain specials.
Grocery chains have been moving far too slowly in answering the challenge set forth by super discounters. Most conventional grocers brag of having great customer service, a large variety, hot foods, organic product, clean stores and other promising claims. But that's all old hat. This just isn't enough anymore. Consumers are turning to food retailers that offer more choices, a greater shopping efficiency, personalized attention and everyday low pricing.
Even though typical grocery store chains are struggling to survive the new food industry trend of discount vehicles, we shouldn't count them out just yet. The stronger of the conventional contenders are turning the pages of the past and moving forward with their own innovative plans to hold onto the shoppers they already have and even recapture some who defected to discounters.
There has been a dramatic move more recently to concentrate merchandising efforts toward the peripheral areas of the supermarket in order to establish the niche to grasp a larger slice of the pie. For example, fresh foods are getting a whole new upscale identity to attract consumers who want healthier and more nutritious fun-loving types of product with a personal touch of service.
One department that has the proven potential for a niche is produce. The produce department has all the ingredients to be the impact leader of the fresh food areas within a store. Fresh fruits and vegetables are naturally low in calories, sending a healthy message to shoppers. The freshness, the colors, the variety, the nutrition and the varying displays all make up an exciting fun department in which consumers enjoy shopping. Produce has the influential power to lead the drive.
Every supermarket chief executive officer and management executive should wake up to the fact that the produce operation is a strong force that could benefit companies from declining any further in the marketplace. If promoted properly, the produce department could be a vital niche needed to draw the interest of shoppers.
However, there has to be a firm commitment by senior management to fully support an aggressive niche program. It can't just be the same old theme on a paper sign reading, "Freshest Produce in Town," while the lettuce is wilting away as a result of the usual labor cutback. Maintaining a fresh produce department takes special care and handling by a full, solid team of people.
It is well known that all food retailers would more than lose the fight if they made a snap-decision to just lower prices as a means of trying to gain back market share.
This strategy only puts a retailer in a very costly catchup phase -- one it couldn't afford.
There must be more of a compelling reason for consumers to want to shop a specific conventional food store these days. One of the better ways to beat a low-pricing theme is to offer better value to shoppers.
Corporate gurus can no longer rely on old-fashioned supermarket traditions. They have to change worn-out philosophies, develop a niche, add value to product, offer great service, put on a new look and maybe even change their banner names.
Food stores have to hit booming home runs in front of shoppers today in order to become the Babe Ruth of supermarkets. Otherwise, there is no way for the common supermarket in today's retail landscape to have a favorable end result.
