Tuesday, March 1, 2016

With A&P Gone Could Others Follow?

As times change legacy grocery store companies must as well. That leads to ask, have you noticed that Kodak nearly went out of business? Growing up in the 1960’s and ‘70’s, every family had a Kodak Camera and I still have one of mine. Those yellow boxes were everywhere and getting your very own Kodachrome camera was seemingly a rite of passage, heck, Paul Simon even wrote a song about it.

Back in the day as digital cameras gained popularity, Kodak stuck to what they believed. They sneered at digital’s quality, righteous in their knowledge that Americans would NEVER give up shiny pictures or their photo albums.

Today, cell phone cameras take most of the pictures and they are rarely printed. Kodak virtually shut the doors, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook.

Legacy grocery retailers need to be mindful of consumer migration too grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food and new non-traditional points of fresh food distribution. For Being dead and correct is not a great strategy.  Today legacy chain foodservice retailers are either growing or dying much the same as Kodak. Simply look at restaurant foodservice retailers that filed bankruptcy of late: A&P, Haggen and restaurant chains Claim Jumper, Mr. Pita, Friendly’s, Chevys, Sbarro, Perkins.  They are not all dead but they have been far from right.

These are statements frequently heard from legacy foodservice operators. Like Kodak, crystal clear that what has always worked will continue to work.

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we deliver.
• We don’t allow our brand to wander, we protect our brand.
• We don’t use online ordering, I-pad ordering or voice screen ordering.
• We don’t advertise on Google, Twitter or Facebook.
• We don’t open for breakfast.
• We like the umbrella approach each store different personality but under one umbrella.
• Video menus and video signage is visceral gimmickry.
• We don’t measure ingredients, we create daily specials and simply show employees how to make it
• We can’t raise our menu prices or we never lower prices.

How did a dominant brand and sector leader like Kodak, in a rock-solid consumer staple of 50+ years lose everything? Simple, they determined the market, the direction of that market and took the steps to conquer it.  If that sounds like your grocery store, restaurant, retail foodservice outlet, or niche leader, you better keep reading.

There is little about today’s market, the consumer or food marketing / promotions that was predictable 3 years ago. In the next three years the rate of change will continue to increase. So let’s look at the above list:

Reliability and a comfortable working relationship is correctly a key to success.  However, if you find your team is blaming the economy, minimum wages increases, cost of health care and rising food cost for disappointing results. It might be time for you to get nervous.   Do not forget that many other foodservice companies the ilk of pantry buster Hello Fresh, Plated, and Munchery are growing the top and bottom line, number of units and garnering market share.  It might be time for Outside Eyes.

We always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk
of Livingsocial and Groupon and how can you know what works. Here is the point, what you measure you manage. All advertising must have an objective that is clear and measurable to insure a proper marketing ROI.

We don’t deliver – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing.  Delivery is not about you. That’s right it is about the consumer.

We protect the value of our brand and its integrity for the consumer, our shareholders and stakeholders.  We know the consumer is dynamic not static, but our customer’s comeback because we have a brand promise and they trust in us to keep that promise. Sounds a lot like Kodak, Walmart, and Publix don’t you think?

We don’t use online ordering our food does not “carry” well.  Think about this if you don’t have a way to connect your menu to computers and mobile devices, your competition will woo your customers. Consumers are time starved, and hooked on technology, make it easy.

Google or Facebook – as above, set up a Facebook page, it costs nothing. Have someone help if you need it and then monitor your page 5 minutes a day.  Don’t think about it get started today.

We don’t open for breakfast – you pay rent 24/7, find ways to increase the utilization of your “factory”.
McDonald’s found incremental success with all day breakfast. Considering catering or school lunch program, contract out your kitchen.  Don’t become the next Kodak of chain restaurants, grocery stores, or convenience stores.

Different store brands / personalities under one large corporation and all expected to operate utilizing a uniform set of metrics.  Worked well in the 70’s, 80’s but you have the answer.  Let me know just how well that works out.

Visceral gimmickry does not replace high quality food and great service. However, visceral digital menu boards that tell a story as well as present your product with transparency add contemporized customer relevance.  

If you don’t care what your product costs, you CAN’T make money. We can’t lower or raise our menu prices – tell that to the gas station owner on the corner, or the farmer growing your food. When costs are going down or when they are up, you must adjust your menu prices or you will not exist.

Kodak management, smart and hard working as they were, did not see the world changing, fortunately you do. Realize that change is good and necessary. Act now to challenge your assumption, create new revenue streams and increase profits.  Success does leave clues, Disney movies leave you with a smile, being dead and correct is not a great strategy.

www.FoodserviceSolutions.us since 1991 has been the leader in the Grocerant niche and a global retail food consultancy firm based in Tacoma, WA, leading foodservice innovation in the Grocerant Niche, with Mix and Match Meal Component Bundling Ideations.  Follow us at: http://www.linkedin.com/in/grocerant, Steven Johnson Contact: Steve@FoodserviceSolutions.us Call 253-759-7869

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