Reed Supermarket Case Study

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Reed Supermarkets:
A New Wave of Competitors
At 4:30 p.m. on December 6, 2010, Meredith Collins, VP of Marketing for Reed Supermarkets, walked down the sidewalk of the 10-store strip mall that housed Reed’s Westgate Plaza branch in Columbus, Ohio. Collins didn’t shop; instead she took mental notes about store traffic, first at the Reed store and then at an indirect but increasingly worrisome kind of competitor—a dollar store. The Reed was predictably well lit and inviting, and Collins could see three registers open and two or three customers in line at each. “Not too bad” she thought, “but not what I would hope for at this time of day, this close to the holidays.” She’d felt the same way at two other Reeds
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While Reed had started as a lower-end retailer 80 years ago, it had continually expanded and upgraded its stores, adding new departments and expanding higher-margin offerings like prepared foods and flowers. For two decades, Reed stores had been considered high-end in the supermarket business. In addition to a full assortment of standard groceries, baked goods, meats, seafood, paper goods, and health and beauty items and a pharmacy, a typical Reed’s featured a vast case of mostly fresh seafood, including live lobsters and crabs; imported packaged goods ranging from 27 kinds of mustard to three different brands of snails; and an array of 20 different prepared entrees available for takeaway. The chain was well-known for the quality of its produce and its emphasis on organic produce. Reed also differentiated itself by offering attractive stores, long hours, elegant (and often creative) serving-case displays, and exceptionally attentive customer service. The checkout clerks wore distinctive red aprons, greeters offered free cookies to customers on the weekend, high staffing levels ensured short checkout times, and runners shuttled bags to customers’ cars—no tipping, please.
The Columbus Market
The Columbus, Ohio, market was relatively stable, but Reed had experienced modest share declines in the past—which was why Collins had taken a week away from the home office to eyeball shopping centers there. The Columbus metropolitan area, where 25 Reed stores were located, was
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