Wednesday, July 23, 2014

Are Whole Foods and Publix Ready To Team Up?

Better for you fresh prepared food is driving success in every sector of retail foodservice today. Whole Foods is clearly the industry national leader.  Every other grocer would love to sell Ready-2-Eat and Heat-N-Eat prepared food the like Whole Foods. Is Whole Foods for sale?
Safeway, King Kullen, Publix and Kroger are positioned squarely in the middle of the grocery / supermarket sector in the United States. That is one place no company can thrive in todays bifurcated marketplace. While each retailer does a good job for what it is doing today. They may not be enough for it’s not about offerings, operations, or new openings the consumer is dynamic not static the industry is evolving faster than most middle of the road retailers.
Simply put there is no lasting opportunity being stuck in the middle. While each offers Ready-2-Eat and Heat-N-Eat fresh food they are not doing with enough quality differentiation for consumers to notice. On the Legacy CPG side they are simply put Stuck in the Middle.
We don’t need to look far away for examples of what may be on the horizon for these legacy companies that are in quagmire of their own making. This year middle of the road grocery retailers in Great Britain are experiencing a uniquely challenging environment complicated with unwanted declining sales.
Both Tesco and Morrisons are capitulating market share due to management strategies that put them in the middle of the grocery sector in Great Britain. Here is what’s bad, they are capitulating share to Lodi and Aldi each known as ‘discounters”.
Nielsen found In the 12 weeks to 24 May 2014 that Aldi and Lidl continued to outperform in the U.K. market with sales increases of 33% and 22% respectively. Along with Waitrose, they are still gaining market share.
In the United States Aldi is no stranger today Aldi has 1,275+ outlets. They are the fastest growing grocer in the United States. Like the U.K. Publix has discounted companies the ilk of WinCo and Aldi that continue to garner market share everywhere they open. WinCo had increased the size, quality, and positioning of its Ready-2-Eat and Heat-N-Eat offering providing additional points of consumer differentiation.
With a bifurcated food marketplace growing even clearer being stuck in the middle is not a good thing. Companies the ilk of Whole Foods, Wegmans, and Metropolitan Market are positioned opposite Aldi and WinCo and will do fine. Others will have to migrate from the middle leveraging Grocerant Niche tactics to elevate and educate brand positioning. Should Publix buy Whole Foods and move into Up-Market Fresh Prepared Grocerant Niche ‘Better for You’ food? Foodservice Solutions® Grocerant Guru™ says ‘What other choice do they have!”

Steven Johnson is Grocerant Guru at Tacoma, WA based  with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche

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