The Mighty Food Battle
When my mother was a young, she worked as a clerk in a grocery store. All the goods were stacked behind the counter and the customers handed her a shopping list. My mom gathered the items, rang up the sale, then had the groceries delivered.
We grew up in the age of supermarkets. Mom, armed with her weekly shopping list, was only too happy to push the grocery cart through the aisles and pick up what she wanted, instead of having to wait for someone to get it for her. And the supermarket offered tremendous variety, unheard of in the grocery stores of her youth.
Today, the supermarket is only one of the many places we purchase food. The options for the consumer are staggering, with more types of stores selling food every day creating a battle for market share and the need for each type of retailer to stay on top of their game.
The Supermarket
Expect new formats targeting specific niche markets, according to the Food Marketing Institute, a trade association of food retailers and wholesalers. Beleaguered from all quarters — mass merchandisers, farmers’ markets, specialty stores, club stores like Costco, convenience stores, drug stores and even hardware stores — the supermarket is reinventing itself. The new niche supermarkets emphasize gourmet/specialty (66.7 percent of the stores surveyed by FMI embraced this format), natural/organic (50 percent) and ethnic (25 percent).
In addition, the supermarket is fighting back with such attractions as:
- Space for cooking demonstrations (72 percent of new stores). Cooking demonstrations create in-store excitement and interest and have the potential to upgrade the customers’ cooking skills and increase cooking frequency
- Coffee bars (53.7 percent have a coffee bar in at least one store), pharmacies (55.7 percent) and gasoline (25.4 percent), for one-stop convenience
- Quick stop area to purchase staples and quick meals (18.3 percent) to cut down on shopping time
- More supermarkets are offering delis (91 percent), fresh prepared takeout food (83.6 percent), and an ethnic food aisle or section (79.1 percent)
Mass Merchandisers
Wal-Mart Stores Inc., the nation’s largest food store is now heavily promoting organics. And Target Corp. is continuing to increase the variety of its food offerings. While the profit margin for food is low, since food is an everyday need, it’s a great lure to bring customers into the store more frequently, then sell them higher-margin nonfood items.
Shopping Centers
From the Time Warner Center at New York’s Columbus Circle to the Westfield San Francisco Centre, upscale shopping centers are thinking food. The Time Warner Center boasts a gorgeous Whole Foods, with picture-perfect produce, flowers, ready-to-eat fresh meals, as well as the usual supermarket offerings. Expect a similar experience at the Westfield San Francisco Centre when Bristol Farms, a Southern California grocery chain opens this fall. Shopping Centers in Europe, Asia and Australia have been successful with this format.
In the mighty battle for the consumer food dollar, some retailers will bank on making the shopping experience as quick and efficient as possible, relying on technology like self-scanning checkout and other high-tech payment options, paying by id number and finger scan, computer-enhanced shopping carts and information kiosks.
Others will compete on price by stripping costs and passing down lower prices to be more competitive with discount stores. And still others will concentrate on creating an appealing experience, making it a pleasure to shop for groceries. Only time will tell which strategy will work best. But consumers can only gain with options for shopping to fit every need and lifestyle.
INSIGHT:Food selling is a $624 billion business; the stakes are high. With consumer purchase fragmented, there’s no one way for food producers to communicate to food shoppers. Now’s the time to experiment with a wide variety of communications tactics, tailored to each type of retail operation.
