How Consumers And How Large Supermarket Chains Match Their Needs For Terms Of Products, Price And Customer Services

Because the retail grocery market is typically low margin, “typically in the mid-single digit range”.(VALUELINE, 2013) It is critical for companies to have some type of cost advantage over peers, the larger chains may be able to obtain better and cheaper access to products than the independent stores(economies of scale). Labor is also a significant cost to retail grocers, representing 50% to 53% of total operating costs (EHOW, 2013). Other operating costs (including rent, utilities, transportation, and technology) are controllable by the company. Lastly, technology costs are key in the retail grocery industry in order to increase efficiency in operations and aid marketing aids. Point-of-sale systems can help to increase inventory turnover and sales and lead to better targeted customer marketing (COUNTERPOINTPOS, 2013)

We have all been to a supermarket or store at some point in our lives. Have we found ourselves placing items in the cart that we did not come to buy, and why is that? Is there a reason the products we need are located in the back of the store? Marion Nestle wrote an article entitled, “The Supermarket: Prime Real Estate.” She teaches in the department of nutrition and food studies at New York University. Nestle writes a column regarding food for the San Francisco Chronicle. Shortly after reading the title, one can determine Nestle opposes supermarkets. “Prime Real Estate,” indicates that large supermarkets are feeding grounds for them against unsuspecting customers. Supermarkets can determine what somebody will buy, based on where the store places certain products. The general argument made by Nestle in her work, “The Supermarket: Prime Real Estate, is that supermarkets are taking advantage of our unconscious mind and we are purchasing products on impulse.

(Please note: Task 1, 3 & 4 have been combined together into one report. Task 2 is separate and can be found on page 9)

In a day of, “I want it now and I’m willing to pay for it,” a shopping center has to offer a variety of stores, and also have several options. The shoe shopper will go to the place with 5 shoe stores before they go to the place with only 1. They may not realize that of the 5 available shoe stores; only 1 is in their price range, but satisfying a wider variety of consumers will help the mall broaden the shopper’s experience. But it is important to remember that shoppers are price sensitive, so not only do you need a variety of stores offering a variety of products, but you also need to be able to provide a variety of price points so you don’t limit your shopper demographics.

1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive

This essay will use the Porter’s five forces to analyse the supermarket industry in the US, and I will make a decision on whether the US supermarket industry is attractiveness based on its overall profitability level.

Supermarkets are one of the many components that contribute to the expansion of the U.S. economy. There are several chains of supermarkets in almost every state, but they cannot be all considered the same. For instance, Publix, Aldi, and Walmart are three of the most popular supermarkets in the U.S., and each one of them has something that its respective consumers value the most, which makes it unique and favorable for the competitors. Therefore, choosing value propositions that will differentiate them from the competitors are a major factor to consider in marketing. This is crucial for the growth of any business because the development of all enterprises lies solely on the effectiveness of its

Trader Joe’s is a leading firm that is taking over the supermarket industry. The company completely altered the idea of a traditional supermarket and turned it into a whole new experience for consumers. Through Trader Joe’s strategic planning, they’ve paved a way for consumers to have high-quality products while paying low prices. Trader Joe’s provides fewer products that are health-conscious, unique and privately labeled. Trader Joe’s has utilized this, secrecy, employee job satisfaction, culture and starting trends to its advantage. Within its industry companies are divided into different strategic groups. Aldi, similar Trader Joe’s strategic planning, is apart of the cultured-discount neighborhood market. This firm continues the low-stock, less-waste, small store, and low price method. A Walmart express used a hybrid strategy that made it a cross between a grocery, pharmacy, and convenience store. Tesco is the third that falls with small neighborhood markets strategy and focused on organic products, similar to Trader Joe’s. As the company grows and expands, there is caution in change of Trader Joe’s processes. With growth, there comes new management and employees which can alter the way a specific store is ran and there is worry of change in the stores normal procedures. Change that doesn’t follow the process could ultimately result in a downfall, so this can be considered a key challenge to watch in the future. Increased bureaucracy is additionally a

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

Larger stores also offer people the convenience of additional services along with their shopping, for example post office, pharmacy and opticians. By addressing consumer’s expectations and using their buyer power they can offer a choice of products to reflect consumer’s diverse budgetary, dietary, ethical and environmental requirements. Furthermore their global buyer power enables consumers to benefit from choosing exotic produce all year round. With 30,000,000 customers (Bevan cited in Allen, 2009) choosing to use the big four supermarkets on a weekly basis it would suggest that they provide a format that consumers want.

Publix Super Market. Describe the type of business market, its business share, financials, size and global presence.

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.

This case involves a mid-sized, regional grocery store chain called Reed Supermarkets. Reed has 192 retail stores, two regional distribution centers and 21,000 employees in five states in the Midwest of the United States. This case discusses Reed’s market strategy for the Columbus, Ohio, market in particular, which is one of Reed’s largest markets. The Columbus market has grown slightly over the past five years, while Reed’s market share has dwindled slightly in the market. Reed has watched their market share stagnate with the entrance of new competitors (10% growth in stores) and a dramatic shift in customer preferences to value or

Today’s customers are more aware and empowered, and have more bargaining power due to the exponential increase in competition – direct, indirect or substitute. In retailing, they want hassle-free shopping, have less time at their disposal to locate the shop and the merchandise and are reluctant to keep waiting. The modern format retail stores are doing their best to anticipate the customer’s demands and are going all out to redesign their store interiors, offer more choices in varieties and assortments, and are giving as many services as feasible.

There are 92,796 grocery stores in the UK and the market value increase by 19.5% in the last 5 years and according to IGD forecast the UK grocery market should reach £203bn by 2019. But what we can see in the figure 1 that from 2009 to 2014 annual grow in the grocery market start decreasing from 4.9% in 2009 to 2.8% in 2014. One of the reason for this is difficult economic conditions which had an effect for consumer spending. Consumers choose to spend less money on food by buying less food or by looking for cheaper places. Retail market is diversified into three main sectors: Hypermarket and superstores which accounts for 42.3% of retail market, convenience stores 21.4% and small supermarkets 20.3% (Figure 3). So about 84% of sales are done in these three sectors. The biggest 4 retail chains in UK are: Tesco which takes 28.7% market share, Asda has 17.3%, Sainsbury’s 16.6% and Morrison’s 11%. (Figure 2) So, if we will sum up 4 biggest retail market chains we will have about ¾ of market share. Finally, a strong characteristic of this sector is competition with price wars and a