WSL Future of Health Event

Small grocers make big impact

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Most of the important mass retailing news this year is being made by grocery retailers.

Most of the important mass retailing news this year is being made by grocery retailers.

Moreover, it is news not concentrated or focused on one or two major retailers, but rather on a large and impressive group of regional supermarket chains. Further fueling the interest is the fact that the grocery retailers making news these days are the same companies that have grabbed headlines throughout the past 10 or 20 years.

Most unique here is the fact that these headline makers are not seeking market dominance across the country, or even striving to dominate a certain geographical area. Rather, they are content to lead in a region, a state or even a city. Moreover, once they prove their worth in a specific market, they quickly determine that they can duplicate that success in another market — even if that second market is geographically distant from their initial success.

The issue that complicates this kind of apparently random growth is that it fails to build on the previously established brand recognition, brand performance or brand reputation that made this kind of expansion possible to begin with.

That it works — that regional grocery retailers have successfully built their businesses on a market-by-market basis — speaks to one fact: They know how to sell groceries.

Consider, for example, Publix Super Markets, the Lakeland, Fla.-based grocery chain that until recently was content to limit its presence to the Sunshine State.

Today, Publix dominates in several areas in the southeastern U.S., including Atlanta and several markets in the Carolinas. More important, Publix apparently has only to enter a new market to succeed in that market. Its reputation may not precede it, but the quality of its offering and its much-lauded level of customer service is beyond questioning.

Much the same can be accurately said of H-E-B in Texas, Weg­mans in the Northeast, Whole Foods in markets throughout the U.S., and such relative newcomers as Aldi and Trader Joe’s.

Indeed, Aldi has become a nationally recognized grocery retailer simply by opening stores in various communities and stressing such basic retailing principles as quality products and extreme value.

Aldi doesn’t dominate markets; it simply becomes a leading retailer in each of the markets it serves by giving customers what they say they want.

As for Trader Joe’s, it is writing a different story. Put another way, it attracts and retains consumer loyalty by offering a unique combination of innovative products at hugely competitive prices and supporting that proposition with legendary service and a focus on the shopper that no retailer in America beats.

Trader Joe’s, which had its start in Southern California in 1967, did not expand outside California until 1993. The chain now operates stores in 40 states and is scheduled to open its first outlet in Alabama on October 2.

There are other small grocery retailers making an impact in the United States — and there will be still others going forward. Though they differ, sometimes sharply, in how they go to market, they share one element in common: their emphasis on value, on giving the shopper more than she reasonably hoped to get at the local food store.

There is a lesson in this that they continue to learn while their larger competitors are trying very hard to forget it.


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