Wednesday, July 19, 2017

Grocery Competition Focus is on Quality & Price

There is little doubt that regional grocery store chains have had an easy time competing with each other and repositioning when a company the ilk of Wal-Mart came along and garnered some of their customers.  Most regional grocery stores simply raised prices and touted food quality and service as a differentiator and it worked according to Tacoma, WA based Foodservice Solutions® Grocerant Guru® Steven Johnson.

Consumers are now resetting the Price, Value, Service Equilibrium according to Johnson and the new formula is:

(Mobile Access + Digital Payment + Delivery) X (Price + Food Quality + Speed) = Value

A new report from Bain & Company grocery store discounters are increasingly picking up customers from segments that tended to be more focused on traditional US stores.  According to the respondents, good value and low prices are the most important features shoppers, cited by 60% and almost 60% of respondents respectively. Around 50% of respondents convenient location and fresh produce.

For the most part the Bain report found respondents across various traditional stores, mass stores and clubs agree that store-brands are just as good – while, when including those neutral to the proposition, the vast majority of respondents (at around 80%) agree.

The Bain report went on to day that “One area of potential concern for traditional retailers is that, once people have tried (discounter) Aldi products, they tend to find them as good as, or better than, national name-branded products. For staples for instance, around 97% at least agree with the statement, while 95% agree with the statement for other dairy products. Canned food and nonperishables too was found to be strongly agreed to by respondents, at around 95%.”  These are good numbers and cause for concern.

Respondents were the least keen on fresh meat / seafood, baby and pets and personal care, at 80%, 75% and 70% at least agreeing that the categories are as good, or better than, national name-brand products. The fact is WinCo, Aldi, and Lidl private branded products are according to consumers GOOD.

Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit for more information or contact: Remember success does leave clues and we just may the clue you need to propel your continued success.

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