By Mike Sleeper, President/CEO, Imperial Distributors, Inc.
Things are looking up for supermarkets. Everybody seems to agree, even
Wall Streeters. The weakening of Wal-Mart is a factor in the rosy assessments
(see last month's column). But there's much more to it than that.
Underpinning the optimistic view is the widespread belief that only the
best among chains and independents have held it together through the dark
days: Survival of the fittest applied to grocery stores. And survival,
as a scientist said recently, is won by the species that can adapt best
to change. Not necessarily, he added, to the biggest, strongest or swiftest.
The big chains--Kroger, Safeway, Publix and several others have just come
off a year of good sales increases. Kroger's gains are especially interesting
since it faces Wal-Mart in more areas than anybody. Medium-size chains,
like HEB in Texas and several New England chains have also come up with
impressive gains. Independents, supported by wholesalers offering a variety
of new programs, aren't taking a back seat, either.
Perhaps it's because operators look around and see how many of their competitors
have fallen that the ability and instinct to change and to adapt is reinforced
by a feeling of confidence and good morale.
The process of adapting rests in part on differentiation, on making your
operation different from the rest. As a small-scale example, there's a
Chicago supermarket scoring with a Friday special on specially baked pizza.
More typically we're seeing coffee bars; more demo stations; expanded
deli departments with party trays (including gourmet veggie platters);
heath ovens with leaping flames; prepackaged meals; service salad sections;
in-store bakeries with specialties like fancy brownies; and leased-out
departments, such as hardware stores to restaurants, and digital photo
printing kiosks. Promotion has also become sharper, encompassing everything
from supporting local events to parking lot pet parades.
Non-foods are doing their part.
We've found that our best customers are responding to the "let's-go-guys"
spirit with more daring in purchasing and selling opportunity items. "Opportunity
buys" are a response to retailers' enthusiasm, to take a position
rather than waiting to get the lowest cost and best value.
Supermarkets can gain an important distinction. Shoppers may not remember
where they saved 3 cents on a tube of toothpaste, but they will certainly
remember where they got value and low price on an appliance, a dinner
ware set or buy one get one free HBC pallet promotion.
Life will never be a bowl of cherries for supermarkets. But our traffic,
merchandising/operations skill and ability to adapt make us the fittest,
in the battle for survival.
Non-Foods'
Role in Survival Strategy