Traditional supermarkets are under siege – they’re being squeezed on the discount side by Wal-Mart, Meijer and other hypermarkets, and on the upscale side by organic/natural foods chains such as Whole Foods and Wild Oats. Strategies for staying in business in the face of those dual onslaughts took center stage at the Food Marketing Institute’s recent Retail Store Development Conference in New Orleans.
The depth of supermarkets’ woes was spelled out during the conference’s opening session, entitled “The Future of Food Retail.” That presentation, by Jim Hertel, a senior vp at the food retail consulting company of Willard Bishop, included this eye-opening statistic: Supermarkets’ share of the grocery/consumables market in the U.S. has dropped from around 90 percent in 1988 to just over 50 percent today.
To keep that figure from falling even further, Hertel offered the supermarket chains several strategies, including: finding ways to better serve their existing market while also keeping their eyes open for “the next big thing”; and implementing services and amenities that put the consumer at the center of their business.
Strategies for retaining market share were also at the heart of several other sessions. Lippincott Mercer’s Peter Dixon (who’s also a member of VM+SD’s Editorial Advisory Board) gave a keynote address on global retail trends. He advised supermarkets to differentiate themselves from competitors in five areas: lighting, color/materials, electronic merchandising, sustainability initiatives and sensory branding (the use of colors/materials/sounds/scents to create a distinct identity for their brand). He gave several examples of brands that are pursuing one or more of the above strategies, including McDonald’s and Samsung.
The conference took place in New Orleans, which is still struggling to get back on its feet a year after Hurricane Katrina hit. That massive storm’s continued impact on the city was reflected in the conference’s programming in two major ways. Jay Campbell, president and ceo of a wholesale food business that operates in Louisiana and neighboring states, gave a keynote address on disaster-preparedness. Also, attendees took a tour of three restaurants owned by Dickie Brennan & Co. in the city’s French Quarter, all of which were closed for a period of time because of storm damage. Brennan’s Herculean efforts to get the restaurants reopened as quickly as possible served as an inspiration for conference participants seeking to weather the competitive storms they are facing.