From November 2007

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Balancing for a breakthrough
Supermarkets that tend to be most successful at winning over shoppers and breaking through the sea of sameness are those that satisfy consumers on both the rational and emotional fronts. By SIRS’ measure, a “breakthrough concept” is one that outpaces the competition in at least two of four key “where to shop” drivers.

Again, the retailers identified as “winners” on this front are Bloom, Publix, Wegman’s and Safeway Lifestyle; all four hold a significant advantage in “emotional” drivers and are considered competitive on value. Each scored above average in overall ratings and all are recognized as “destination stops” for perishables and specialty items.

Wegman’s and Publix outshine the competition in three of four “where to shop” drivers. Interestingly, Wegman’s operates large superstores; Publix shops are in line with a traditional supermarket in terms of square footage.

The SIRS study finds that Wal-Mart’s appeal is singular – low prices – and, as any industry expert can attest, that’s a vulnerable position to be in. Shoppers rank the perishable and specialty departments in the stores “below average.” While it’s hard for competitors to challenge Wal-Mart in the staple groceries and non-food categories, the decline in trust and concern looms large.

Still, Hauptman insists that Wal-Mart will continue to play the price card to its advantage, and suggests that in today’s economic climate, their strategy bears monitoring.

Wal-Mart prices are regularly 13 to 18 percent lower than traditional supermarkets, he says, and “over the last few months we’ve noticed a shift in their temporary price reduction strategy.”

The rollback pricing used to last 90 days; now, there are a number of items for which rollbacks are as short as 30 days. That change “creates excitement and builds traffic,” Hauptman says. “These temporary price reductions are another way that Wal-Mart is using its pricing expertise to compete – and, let’s face it, they’re fierce competitors.”

SuperTarget stores also took it on the chin in the SIRS survey. While the company gets plenty of buzz for its apparel, home goods and celebrity designers, the food business is often mentioned as an afterthought. On three of four drivers, SuperTarget was categorically average. Like Wal-Mart, SuperTarget’s perishable and specialty departments are “below average” performers, according to the SIRS findings. The stores enjoy a solid rating for delivering a fun and enjoyable shopping experience, yet this could be a halo effect from Target’s strong general merchandise image.

Sweetbay Supermarket, the reincarnation of the former Kash & Karry chain, is considered “one to watch” among industry experts, but shoppers are not biting, according to SIRS findings. While the Sweetbay stores are achieving better ratings than the old Kash ‘n Karry units, the concept is “average” in the eyes of consumers. To be fair, the company only recently finished its transformation, which means shoppers may still be testing the waters.

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