Marketing from the Grocery Aisles: Bigger Isn’t Necessarily Better

I haven’t written a post in a while, owing to helping my husband with his new real estate business – Rich Lary Realtor – and also switching from marketing products to developing campaigns to raise awareness of security issues. Marketing from the grocery aisles, however, haven’t been far from my mind.

Recently, I was browsing through the website Progressive Grocer, and stumbled on their “Top 50” list of grocery stores. Topping the list is Walmart with 3,416 stores and $275 billion in sales. Their focus is low prices across many channels.

With 2,424 stores across 31 states, Kroger is second, concentrating on new customer channels and store formats. grocery-shopping

Surprisingly, Target is third, taking a different approach to retailing by creating urban markets in large cities like New York, Los Angeles, Chicago, and Seattle. Branded CityTarget, these smaller stores carry everything from jelly to jeans, and focus on goods that appeal to urban dwellers. Shoppers can also scan codes with their mobile devices to see Target’s full selection, and order online.

The fourth and fifth top chains are Safeway (Pleasanton, CA), and Public (Lakeland, FL). To compete, Safeway, which includes Vons, Pavilions, Randalls, and Tom Thumb stores, offers a digital marketing/loyalty platform and fuel rewards program.

The list of the top 50 continues with Grocers Supply (Houston, TX), Central Grocers (Joliet, IL), Marsh Supermarkets (Indianapolis, IL), Grocery Outlets (Berkley, CA), and Super Grocers (Santa Fe Springs, CA) at the bottom of the list. Even though some of the chains have more stores that those higher in the list, they have lower sales. For instance, Grocery Outlet (#49) is an extreme value retailer with 185 stores, while Marsh Supermarkets (#48) has 90 stores.

Consider the grocery stores in your area. Some are more upscale, carrying higher ticket items, wider selection of fresh and prepared foods, and sizable bakery, deli, meat, and wine departments. Progressive Grocer explains, “Gaining an edge in the present era requires an ever more delicate balancing act between price, selection and service on one end and cost containment and capital investments on the other.”

Another factor is quality. Big doesn’t always equate with better. The Fiscal Times published an article on “The 12 Worst Supermarkets in America,” citing long lines, rude employees, unsanitary conditions, and poor selection contributing to shopper dissatisfaction, and not doubt, preference for one store over another.

Rated in second place as the worst supermarket in America is Walmart with reviewers rebuking stores’ service, food quality, and cleanliness. In addition, 32% of reviewers said they experienced three or more problems. Nevertheless, low prices, and probably convenience, keeps shoppers coming back.

grocery-store-image-fv Number one on the list of worst super markets is Pathmark, which is owned by A&P (18th largest supermarket chain in the nation), and has stores in Delaware, New Jersey, New York, and Pennsylvania. Three out of four shoppers surveyed had one or more complaints, and 31% experienced three or more problems.

Every year, the list of Top 50 grocery stores shifts with some slipping, and others rising up in the list. Many factors are at play, the most important, however, is continually gauging and adjusting to meet customers’ needs. A small, dated, but spotlessly clean grocery store with superior customer service and quality products can compete against a larger grocery store. Case is point is Red Apple Markets with 24 “neighborhood” stores across Washington. Tiny in comparison to most grocery stores, these markets offer foods prepared by local companies, and produce, harvested “just down the street.” Their aisles are narrow, displays set up wherever there’s a few feet of space, and the checkout lanes unsophisticated with a smiling associate eager to start a conversation.

My husband and I have whisked into the Red Apple Market in Mount Vernon to grab a bite to eat while bike riding. Several times, we’ve stopped in the Coupeville store to get groceries for our house on Whidbey Island. The entry to this store has racks of locally grown plants, vegetables herbs, and flowers, bins of apples, pumpkins, and other produce, and bundles of kindling. Inside, among the national brands are Northwest products. It’s a delight to visit a Red Apple Market!

When considering how to market a company, put aside that bigger is better, and focus on customer satisfaction and product differentiation.

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