CHICAGO -- Not long ago groceries were the province of supermarkets -- and there was order to the world.
But lately, so many other types of operators have angled into the grocery business that supermarkets are now faced with a key challenge: fashioning unique merchandising approaches that not only draw shoppers, but bring them back.
Four industry retail and wholesale executives who spoke at this month's Food Marketing Institute annual convention here said the answer is to identify areas where a store can create uniqueness and follow up with merchandising that surpasses expectations. While that advice might sound basic, executives stressed that it is actually higher learning.
Those who offered opinions and examples were George Chirtea, vice president of merchandising for Supervalu, Minneapolis; J.B. Pratt Jr., president of Pratt Foods, Shawnee, Okla.; Leonard Harris, president of Chatham Food Center, Chicago; and Robert Stiles, president of Gelson's Markets, Encino, Calif.
"Everyone is after our volume," lamented Chirtea. "Supermarkets used to be the only ones selling groceries. Now we compete with everyone. What are hardware stores doing selling candy? We compete with virtually every retail store out there."
Chirtea said retailers need to develop principles of how they will energize their business and make sure the message is disseminated to all store employees.
He said stores should present a "welcome grabber" to draw people in. This might include a great-looking exterior or entrance, a pleasing baking odor or friendly employees who greet customers.
Stores also need to create excitement and entertainment for children, with lollipops, pony rides, children's gifts or other vehicles, Chirtea said.
While working to enhance excitement, stores can't forget about merchandising basics, Chirtea added. This means satisfying shoppers in areas such as cleanliness, good prices and accurate scanning. "You should run a customer attitudes survey at least once a year so you know what shoppers want," he said.
Pratt noted that his conventional stores' point of difference is a focus on natural and organic products. Four of his 10 supermarkets incorporate such products, which don't comprise more than 10% of sales, but are carefully distributed around the store.
"We didn't have success when we segregated the products in one area," he said. "What worked was when we integrated these products within the store."
But simply placing the merchandise on the shelves isn't enough. Pratt publicizes and educates to help fuel sales.
"We take children through our stores for tours," he explained. "We developed educational brochures on food pyramids and other topics.
"Strong signage and large displays are needed because these products must stand out. We have mass displays of organic apple juice, for example."
Pratt concluded that supermarkets can have a big opportunity in natural food, particularly in areas where shoppers' income and education levels surpass a certain threshold.
Harris of Chatham Food Center, a single-store operator, challenged supermarkets to excel in service, particularly at the front end. "I only have four lanes in my store, but how many times do you go into a store and complain they have long lines -- 20 lanes but only three checkouts open," he said.
Harris stressed the importance of listening to customer requests, even those of the youngest shoppers, and of capitalizing on a store's failures.
"I use opportunities where I have failed my customers to my advantage," he said. "One upset customer passed up three stores to get to me for ham hocks, but I was out of them. I said to the customer, 'give me your phone number and address and I'll bring it to you.' That customer is still talking about my delivery of the ham hocks to this day, 15 years later." Stiles of Gelson's has attempted to differentiate his stores through efforts ranging from ensuring safety to wrapping customer gifts.
The 12-unit operation scans the parking lot with a camera and posts security guards in the lot to deter crime, Stiles said. On the merchandising front, the retailer developed a clipless coupon program to make price savings easier for shoppers, with deli and wine among the popular categories in the 400- to 500-item per week program.
