Are traditional grocery stores headed for a showdown with Wal-Mart Store Inc. (NYSE:WMT) and Target Corp. (NYSE:TGT) soon? By all indications, they already are, as the two largest discount retailers in the U.S. have been fighting with grocery chains like Publix, Albertsons and Kroger Co. (NYSE:KR) for a while now. Wal-Mart has the "Supercenter" and even the grocery-only "Neighborhood Market" while Target has the "SuperTarget." These examples all carry a full line of grocery items.In fact, a recent piece of research shows that 46% of shoppers prefer to shop for food where they can also purchase items like clothing, home accessories and CDs. Should that fact alone scare food retailers that could lose (or are losing) customers to the larger discount chains that are placing "everything merchandisable" under one roof and into one trip?
While some customers shop on convenience and atmosphere -- both of which can be hard to find at a Wal-Mart or Target location -- many shop on price and "one stop shop" alone. What are grocery chains doing about it? Well, traditional grocery stores appear to be reinventing product mixes and creating niches to maintain market share and sustain sales growth. At the same time, these grocery chains are trying to capture the attention of an increasingly disloyal army of shoppers who are tired of the "one stop shop" approach. What can they do? Offer customers something unique, as in excellent customer care, eclectic and exclusive products or an innovative store floor plan.











Reader Comments (Page 1 of 1)
1-16-2007 @ 5:29PM
Mike Marchlik said...
The easiest way for them to compete is to offer pick-up service. Ie. you order your food online then stop by the grocery store at a specific time, pay the bill, load the bags in your car and leave. No more roaming up and down aisles, standing in line on Sunday. I would even pay a 5 to 10 dollar service charge. Anyone know of such a super market in South Jersey???
1-17-2007 @ 3:29PM
Sam Lasley said...
As a retired executive of the Kroger Co. I can tell you that Kroger is already doing a fine job of competing with Walmart in every market where they compete. Just look at Kroger stock versus Walmart.
1-18-2007 @ 2:13PM
Chris said...
Living in the Tulsa, OK area, Albertsons is my only choice for grocery shopping. I will not, and refuse to have any dealings with Wal-Mart after many negative experiences and living in their home state of Arkansas, some of which came down to stupid coupon redemption issues as if they were coming out of the cashier's salary.
One thing to remember is that neither Wal-Mart or Target are a traditional grocery store. I find it ironic that Wal-Mart has someone wandering around the meat area in a white butcher's coat when all of their cuts of meat are prepackaged and come from South Dakota.
From also living in other parts of the country in my life, I can appreciate the environment and true pleasure it is to shop at stores such as Kroger. I, in fact, miss Kroger and wish they would either expand as their name or under the Dillon's banner into Oklahoma. They truly "do it right" the markets I have shopped in. We know that the lowest price alone isn't always the most important when it comes to one's shopping pleasure.
1-19-2007 @ 12:13PM
Vincent Shea said...
In Jacksonville the super Wal-Mart stores do not do a good job of stocking their shelves. Often many of the products are missing from their shelves, the managers have told me that they stock inventory via the computer and through personnel. Additionally, the customer service at the checkout is very slow and many of the employees are arrogant and very poorly trained. They cannot compete with Publix.
1-19-2007 @ 12:32PM
Jim Hamblin said...
On the West Coast, at least, Safeway is doing a good job of updating its mix and presentation with zoned lighting and boutique departments . . . makes Kroger look a bit dated by comparison. Having spent the 80's with a "one stop" format, I learned that facilitating traffic flow between food and general merchandise is a difficult challenge. Target seems to do it a little better than Wal*Mart . . . but they do most everything better than the folks from Bentonville!
1-22-2007 @ 1:19PM
David said...
A niche is certainly correct; and in the DFW area, Carnival has done it. Take a look www.minyards.com
Wal-Mart can't and won't do this. They have no customer service skills; very high employee turn over and frankly, not so fresh food, e.g, meat & produce. I can't stand WalMart for several reasons, but one is that I feel like if the building caught on fire, we'd all be killed - not by the fire, but by the hundreds of shoppers trying to get around the aisles of junk stacked all over the place.
1-26-2007 @ 2:28PM
lenny said...
Target if they were smart would buy Publix.
They both have better quality reputations than say Walmart or Kroger, they could crush all the competition.