Changes In The Social Environment Of Bob's Supermarket

The retail industry is one of the largest industries in the world, by business numbers and employees. Plunkett Research Ltd. As of 2011 Wal-Mart was still the giant of the retail market. As Wal-Mart nearest competitor Target heats up the market, Target seems to be gaining in customer loyalty and has picked up on Wal-Marts grocery strategy. According to the Plunkett report, recession ravaged consumers not only want dry goods at a discount, but they also want groceries discounted (PlunkettResearch.Com, 2012). Target also has been gaining customers who want stylish well organized stores that appeal to their senses.

Superior Supermarkets is in need of a strategic program to help fuel continued growth, market share, and profitability. The current issue of a new pricing strategy is warranted, considering competitive forces, increasing consumer price consciousness, and recent sales being below budget. Table 3 illustrates how SS compares to its competition in terms of product distribution – a lower percentage of grocery and higher percentage of meats and produce. This table also depicts that lower percentage of sales exist for high profit margin items. This information can be supplemented by recent consumer research carried out through telephone surveys and two focus groups.

It has been said that U.S. food spending is increasing, but unfortunately, supermarkets are not making what they should be. Between the alternative grocery methods, and other such societal shifts, this has caused some supermarket chains to have to focus on their more profitable stores, and exit from the less profitable areas. Even though such value-oriented grocers as Walmart are making it very difficult for conventional supermarkets to compete based on price, Publix continues to lead in the supermarket industry where they made $548 per square foot annually. In addition, Publix’s net earnings in the beginning of 2010 were up to $996 million, compared to $877.3 million in the previous year (Mujtaba & Johnson).

The cult following for Trader Joe’s distinguishes it from its competition. This cult is projected to grow as upcoming generations become more and more price sensitive. Loyal shoppers will camp out overnight for a grand opening or, in one example, write 50 letters to the headquarters pleading for a store opening in their state. This is surprising because their target shopper, Millennials, “show little retailer loyalty” when it comes to where they get their groceries. Trader Joe’s has obtained this loyalty through their Every Day Low Pricing Strategy, constantly changing inventories, and superb store environments.

US faced a major recession during the year 2007 and this created a major pre-recession impact and post-recession impact on various retail stores. Customers started looking on for deals in retail market as they had less money to spend. The following document is all about the growth of four major retail giants namely the Kohl’s, Target, Walmart, and Macy’s whose growth over the period 2003 – 2013 are compared and contrasted. Walmart was the only company to increase in sales from the all the above companies as they targeted the lower end customers.

Publix is not your quintessential grocery store, it is so much more. What is it about Publix that make it unique from all the other stores that sell groceries? What are its unique selling points that add extra value to a visit? Why are customers willing to pay more to shop there? To quote Publix President, Todd Jones, “We believe that there are three ways to differentiate: service, quality and price. You’ve got to be good at two and the best at one. We make service our number one, then quality and then price” (Jones, 2013).

Ager and Roberto’s case study on the sphinx-like strategic initiative pursued by the grocery retailer Trader Joe’s, both expounds and upends the strategic tool-kit crafted by Jared Harris and Michael Lenox. For this very reason, Trader Joe’s story encapsulates what –to this writer–could well be called the credo or capstone of strategy: if competitors can nimbly replicate a firm’s course of action; that precept did not hold a formidable competitive advantage. In the year 2013, when the case finalizes its analysis of the grocery industry, Trader Joe’s has set the precedent for unparalleled CAGR (for the grocery industry) and consumers’ demand for continued store expansions. The axiomatic challenge faced by Trader Joes is quite the opposite than that of its competitors, struggling for margins and shutting down stores across the United States. Trader Joe’s must devise a way to appease the overwhelming demand that exists for the retailer, while maintaining its fundamental values that gave rise to its success.

In my opinion, Bob’s Supermarket can not compete with the selling of clothes, tires, and electronics like Wal-Mart. However, they could find products to run 5 for $5 like Krogers or create a loyalty discount. Being that the store has been supported by locals for its lifespan, it can be called “Appreciation Day,” where employees receive special buys or a free item when they spend $20. This would create more business and in the meantime update the overall store so that it has the modern feel of newer

In the case study, Bob’s Supermarket was a small, family-owned grocer. Many of Bob’s potential customers relied heavily on discount retailers such as Wal-Mart for their grocery needs, and many of those that did not shop at Wal-Mart shopped at Kroger or Aldi (Parnell, 2014). These competitors are large, well-resourced companies that have purchasing and distribution economies of scale. Unable to compete on price, Bob’s struggled to find any type of competitive advantage. Bob’s did experience some level of success with its fresh-cut meat and ready-to-eat food products. However, economic conditions had the potential to make consumers more price sensitive. Political, legal, and economic forces all coalesced into a rise in the federally enforced

Customers in the community were “low to moderate income” level, who are hit the hardest, and tend to look to get the most out of the money they have (Parnell, 2014). Therefore, because of the recession the consumers looked to travel another 10 miles to Wal-Mart to save money overall. A recession can have a long-term effect on an industry. Another challenge that was a result of economic environments is the challenge of maintaining low/competitive prices on foods. With the changes on minimum wage and recession, it would cause Bob’s to increase the price of their goods. The vendors and suppliers also feel the effects of the economic impacts and tend to downstream them to the ones who purchase the goods. The recession and economic impact from vendors would make Bob’s take a trying to cut cost by also looking at inventory, causing them to minimize their

The financial crisis that caused the recession caused consumers to buckle down on their spending habits. The three stages that was heavily influenced from the recession were consumer pre purchase issues, purchase issues and post purchase issues. The mind of the consumer took a different approach in how they spent their money. Many looked for bargains and the best buys on food and product consumption. Brand names were not as important to the consumer as much as surviving the crisis.Consumers that found that purchasing the same product at a lower price still met the basic need of survival (Mckenzie & Schardrodsky, 2011).

When entering a grocery store, most people don’t take the time to stop and observe their surroundings, for their soul purpose at that instant is to purchase what very food they may need for that day or maybe even for that week. However, through all the haste of wanting to go in and out of grocery stores as fast as one can, most are unaware of the very culture that they too are now apart of, the interactions, both verbal and through people’s body language that they are experiencing, how people look and dress, even what is considered appropriate behavior although not specifically written down. Culture is all around us, and we all contribute to it, whether it is through our norms, values, symbols, or mental maps of reality (Guest 2014, 38-43). That is why through this assignment, I took the time to observe the culture experienced in the American grocery store Stater Brothers, the ethnical Filipino grocery store Seafood City, while also taking the time to reflect on my own personal views of what I thought was “normal” through my experience working in Northgate Gonzalez Market, a Mexican grocery store for three years.

It is easy to see how Bob’s Supermarket is stuck in the middle. The company is not the lowest price provider and it cannot be the lowest price provider. The company does not have the modern amenities of a larger grocery store and it cannot have all the amenities of a modern grocery store. Bob’s Supermarket is somewhere between a modern grocery store and a convenience store. Since its possibilities for being the best grocery store are limited the company should focus on being the best, convenience (plus) store in the area.

Stores like Wal-Mart are famous for keeping their prices so low. This is one reason why they are able to maintain a grip on the consumers of an area. They accomplish this by keeping the cost to produce and transport the goods low. In January, a study by the Los Angeles County Economic Development Corp. found that, “an individual family could save $589 a year on groceries by shopping at a supercenter. Overall, shoppers could save $3.76 billion in merchandise nationwide.” (Blazier, A, 2004) A major reason they can keep prices lower than mom-and-pop run businesses is their ability to buy merchandise in bulk. Buying in bulk works the same way it does for a consumer. The more of a product that is purchased, the less the cost is per unit. Consumers see this every day when they go to stores like Sam’s Club or Costco. When they buy their merchandise in bulk, they are able to offer it to the consumer at a lower price. (Kale, 2011) This is what could eventually drive the mom-and-pop owned businesses out of the area, and draw a negative criticism from the public. The interesting thing about this criticism is that the public complains about Wal-Mart

Changes in the economic environment caused changes in the social environment for consumers. Bob’s supermarket was hit especially hard by these changes “Some organizations in an industry are hit harder by economic forces than others,” (Parnell, 2014, p.63). The company tried to keep cost low with low wages, no advertising, and diy construction projects while offering differentiators like in store butchers and ready to eat combos. Bob’s Supermarket low cost differentiated strategic approach took a hit during times when consumers were looking to find deals. This caused problems for the company because they have already maxed out their potential to cut cost through efficiency, employee pay, and frugality. They were even getting charged more