Grocery Stores: Good, could be Greater

What a difference a decade makes for our grocery stores. I was reminded of the transformational change as I walked into a Target store. The company is aggressively remodeling urban locations to include the new P-Fresh format. The concept involves remodeling 1500 square feet of an existing store to make room for frozen foods, fruits, vegetables and some baked goods.

Over the last decade, our area has been a battle ground for supermarkets. We had the upscale stores such as Wegmans, Whole Foods, and Balducci’s at one end of the spectrum. Trader Joe’s, Wal-Mart and Target played on the opposite end of the field to those who valued price. With market share being stolen from both ends, what were the middle guys supposed to do?

Safeway engaged in a complete lifestyle change. Literally. After unveiling a $100 million campaign, the company began to remodel it’s stores nationwide with muted lighting, wooden floors and expanded it’s offerings with nut bars, prepared meals, and private label goods. Safeway tapped into the consumer motto of being “cash rich, but time poor.”

Shoppers Food and eventually Giant jumped on the bandwagon to reinvent themselves. While their attempts have been succesful, grocers will need to invest more in private label goods and better prepared meals.

European grocers such as Waitrose and Carrefour have excelled in creating powerful brands that put the national players to shame with attractive packaging and tastier food.

The recession has forced consumers to give private label goods a try. And they like what they gotten in return. But to sustain that momentum, grocers in our area will have to innovate. Their position will need to change from “sellers” to “creators” for them to be not only good, but great.

Update: Waitrose is a high-end supermarket in the U.K. Realizing consumers were trading down in price during the recession, the company introduced a discount private brand dubbed “Waitrose Essentials.” Three months within launch It nearly achieved it’s sales mark three months early.

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