When retail food companies insist on doing what they always did, and doing it the same way they over time the results they get are very predictable. We ask is Walmart the next A&P? Every MBA student will tell you that closing stores losing money and grinding out a profit at the remaining units is template for success.
While every marketing 101 class teaches you that the customer is dynamic not static and if you want continued success you must follow the customer or your brand will lose relevance with consumers. So what is it in the case of Walmart? We asked our team at Foodservice Solutions®, simple put Walmart lost their way according to our team. Aldi, Amazon, WinCo, and Jet.Com all have garnered a spot as lower cost food market position than Walmart in the minds-eye of the consumer.
Walmart’s business model today places them in the middle of the foodservice marketplace. That according to our own Grocerant Guru® is where no retailer wants to be, and like all the rest in the middle they are closing stores.
Walmart has big-bucks so they built big in the form of square feet convenience stores / express stores at about 12,000 square feet each. Then they filled the stores with legacy CPG products and deli style food and service from 1990’s according to Foodservice Solutions® team. All the while Walmart should have enlisted food merchants of today instead of category managers of yesterday. They should have placed greater importance on grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. Today Ready-2Eat and Heat-N-Eat fresh prepared food has taken center stage and center of the table in the minds-eye of the consumer. Walmart is losing customer relevance.
Most express conveniences stores about half the size (footprint) of Walmart’s express units. C-stores today that focus on Ready-2-Eat and Heat-N-Eat grocerant niche food are driving industry success. We are talking companies the ilk of Rutter’s, Wawa, Sheetz, 7-Eleven, and QuickChek. In fact at 7-Eleven close to half of all new units do not sell gasoline.
Walmart has either ignored, denied, or miss understood that for the first time ever, restaurant spending has surpassed grocery sales. Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food is a key driver in customer food purchasing migration patterns.
This is more than just a generational shift according to Steven Johnson, Grocerant Guru® at Foodservice Solutions® “this shift is due in large part by the fact that 50% of Americans over the age of 18 are single, and all ages of single people are adopting, evolving, and migrating to new avenues of fresh prepared food distribution.
Amazon has a food deliver service called Amazon Prime Now that complements its online technological knowhow with robots that help pull products for delivery. All the while Walmart has to hire humans, train them and supervise them. Playing catch-up is expensive in food retail. Once again Walmart is technologically stuck-in-the-middle at best.
So we ask absent a grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food strategy with customer relevance has Walmart started the long slow decline that plagued A&P for nearly 70 years? Walmart is in a quagmire of its own making.
Walmart seemingly designed /called items fresh that were in fact designed to fit into a supply chain that was state of the art in 1995. Ready-2-Eat and Heat-N-Eat fresh prepared does not necessarily fit into that legacy supply chain system. Consumers are dynamic not static and retailers must be as well. Do you need outside eyes for inside profits? Have you designed your products for the consumer or for your supply chain?
Are you trapped doing what you have always done and doing it the same way? Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit: www.FoodserviceSolutions.us for more information
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