Many supermarkets are losing market share to drug stores, dollar stores, convenience stores and warehouse clubs.   Although some supermarkets are bleeding market share, others are becoming more relevant to customers again.  The best strategy for supermarkets is to focus on delivering quality, fresh foods as that is typically what is most important to customers.  Supermarkets that are losing customers are still just focusing on pantry-stocking behaviors typical of shoppers over 10 years ago.  Almost 31% of today’s customers are shopping for items for immediate consumption.

The “center-aisle products” that have a longer shelf life account for 70% of sales, yet they are less important as sales are shrinking in those areas.  Inventory turnover is slowing down for items like Worcester sauce, pickles and confectioners’ sugar.

The fastest growing supermarkets are the ones that offer specialization like Whole Foods.  However, downscale Winco has enjoyed success by varying its strategy and product offerings on a store-by-store basis.  Also critical is to make sure each store reflects local food culture.  For example, Tesco was unsuccessful with its Fresh &Easy stores because it placed many of them in low income and/or low education areas where customers were just not interested in the product offerings.

In order for stores to remain successful and relevant to today’s consumer, they must recognize that today’s middle class customer behaves differently from the middle class customer of previous generations.  Today’s middle class customer is trained to trade up or down and engage in multichannel food shopping.

Discussion Question:

How can supermarkets make a comeback?

 

SOURCE: Sarah Mahoney, August 8, 2013, Marketing Daily