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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