Having just completed its 10th season, “America’s Next Top Model” featuring Tyra Banks gives aspiring models an opportunity to prove they can make it in the high-stress, high-stakes world of super modeling. The series follows a group of young women of various backgrounds, shapes and sizes, who live together and vie for a modeling contract.
Loyal viewers know Banks for her many sayings, which range from the show’s promo line, “Do you want to be on top?” to the simple adjective: “fierce.”
Of course, the world of food retailing isn’t much different. You could say it’s a high-stress, high-stakes world of “super marketing,” with several retail formats (all attractive in their own ways) competing and driving to be on top.
It’s especially challenging because consumers are reducing the number of shopping trips they take, says The Nielsen Co., which unveiled its latest consumer packaged goods research in March. Nielsen, Schaumburg, Ill., said that while shopping frequency across most retail channels is flat or declining, supercenters - which enable consumers to combine shopping trips - continue to show growth.
“Value and convenience are more important than ever as rising gas prices impact where and how often consumers shop,” said Todd Hale, senior vice president of Consumer and Shopper Insights and Nielsen Consumer Panel Services. “Long-term trends show us that all value retailers - supercenters, warehouse clubs and dollar stores - are gaining in their quest to grab shoppers. Keep in mind, however, that some U.S. grocers reported stronger same-store sales growth than supercenters or dollar stores in 2007. Proximity to shoppers and a healthy focus on convenience and value helped many of these grocers deliver solid results.”
Seemingly borrowing from Banks’ terminology, Hale concluded, “Competition for shopper attention is fierce. Success will come to retailers who define themselves by who they sell to and how they sell them, not by what they sell - while success will come to manufacturers who define themselves by who they sell to and the issues they solve for their consumers and retail partners.”
Proximity to shoppers.Extreme focus on convenience and value. Those seemingly are the tenets of Fresh & Easy Neighborhood Markets, an El Segundo, Calif., unit of the British retailer, Tesco. Since Fresh & Easy debuted in the U.S. last November - locating in high-income suburbs and putting perishables at the heart of product line - it’s been the focus of retail industry analysis.
Speaking to attendees at the Food Marketing Institute’s (FMI) Retail Store Development conference last fall, Information Resources’ Thom Blischok called the Fresh & Easy format an “express store” concept, marked by its smaller space, limited product selection and emphasis on prepared foods. Blischok predicted that the express store format will grow from an estimated 20 locations today to as many as 4,000 in 2010. Why? Because 84 percent of current shoppers are only fully satisfied with about 23 percent of the typical store’s merchandise.
These facts aren’t exactly lost on supermarket operators, a majority of whom told FMI that their top five competitive strategies are to (1) emphasize perishables, (2) develop more private label products, (3) emphasize natural and organic products, (4) emphasize consumer wellness and family health issues and (5) emphasize a more unique shopping experience, store design and product selection.
Speaking at FMI’s “Food Retailing Industry Speaks” presentation this May, President and CEO Tim Hammonds observed, “Supermarkets are helping consumers manage their food budgets by offering multiple tiers of store-brand products and fresh, prepared foods - a convenient and less-costly alternative to restaurant food. . . . Retailers are innovating with a broad assortment of ethnic foods, sushi stations and cooking classes and demonstrations to help consumers rediscover their enthusiasm for food. The most successful retailers are acutely aware of their customers’ needs and demand and [are] delivering with precision.”
Supermarkets aren’t alone. Just consider other recent headlines, which note that:
Ten years ago, grocery made up just 14 percent of Wal-Mart’s total annual sales. Today, it accounts for about 32 percent or $120 billion. Officials said this March that recent sales were particularly strong in “perishables, dry grocery and paper goods.”
– “Wal-Mart’s Crossover Strategy Still Works,” Business Week
Fresh produce and deli foods, generated the greatest year-over-year gains during the second quarter at Costco Wholesale Corp., the Issaquah, Wash.-based club store operator.
– Executive Vice President, CFO Richard Galanti, March 2008, in a second quarter conference call
Matthews, N.C.-based Family Dollar Stores will continue to expand food retailing space and cut back on fashion merchandise, including clothing
– Chairman and CEO Howard Levine, April 2008, in a second-quarter conference call.