Wednesday, August 18, 2010

Grocery stores need new sales metric’s and LTO’s.

Consumer demand for ready-to-eat and ready-to-heat food that is fresh prepared, portable and profitable ala the grocerant niche, continues to grow. Why do many grocery stores continue utilizing procedures and operating paradigms of the 70’s,80’s & early 90’s that has contributed to a continued decline in market share too the restaurant and convenience store sector.

Grocers that rely exclusively on category and brand managers focusing on paid shelf space and outwitting consumers with category management or continuous category management tools will see continued erosion of top line sales and bottom line profits. Have you looked at A&P lately?

While successful food retailers are focusing on the consumer, making adjustments addressing concerns of the consumer; they are gaining market share. The average size of the American family is smaller today than it was 10, 15, 20 years ago, however category and brand mangers continue to focus on “basket size” rather than customer, customer frequency or new measurable brand value attributes.

Deli / fresh prepared food must stop focusing on increasing check size and bundling meat in packages of 30 pork chops, a chicken and a half in a package, or mix and match- buy any 10 for $1.00 each. What’s with that? Do they think the industry is going backward? What family are they selling too? Do brand mangers in the grocery industry have degrees in marketing? Or do they have degree’s in that’s what we do?

Consumers want small portions or portions sized for today’s family particularly ready-to-eat meals. Buying 10 ingredients for one entrée or side dish is the not goal of 90% of consumer Monday – Friday. With family size much smaller than it was in the 70’s and people living longer and many living alone, the demand for quality food prepared continues to grow.

The winners, Safeway’s life style stores – smaller check average and higher frequency the same holds for Harris Teeter. A word of caution here grocery stores must look at utilizing LTO’s to prop sales and garner interest going forward much like restaurant chains. Product freshness, visceral attractiveness and consumer focused flavor and texture attributes will continue to dive frequency, loyalty and top and bottom line profits.

Grocerant program assessments available; since 1991 Foodservice Solutions of Tacoma, WA has been the global leader in the Grocerant niche for more on Steven A. Johnson and Foodservice Solutions visit or on Facebook at Steven Johnson or BING / GOOGLE: Steven Johnson Grocerants

No comments:

Post a Comment