KIRKLAND, Wash. -- As Wal-Mart Stores -- the 800-pound gorilla -- evolves into an 1,800-pound gorilla, tactical innovations won't allow supermarkets to remain competitive, but value innovations will, according to a new industry report.

"Strategic value innovation is no longer optional -- it's now imperative for sustainable sales growth," Art Turock, president of Art Turock & Associates here, said in the report, entitled, "Achieving Sales Growth When Wal-Mart Makes the Rules," released last week during the FMI Show.

"To beat this 800-pound gorilla requires focusing on Wal-Mart at the strategic level to detect chinks in its armor," Turock said.

"The key to strategic value innovation involves targeting a specific market segment with the aim of providing a unique value offering that competitors will choose not to match or find too difficult to copy."

Most "beat Wal-Mart" strategies emphasize isolated tactical actions, Turock said, such as increased advertising, special event sales, frequent shopper programs, dollar aisles, customer friendliness campaigns, increased community involvement and underpricing Wal-Mart in high-traffic categories.

"Taken as isolated moves with no coherent strategy, these efforts will be insufficient to overcome Wal-Mart's imposing advantages," Turock said. "Strategy is required -- a strategy that involves identifying a target customer segment and developing for it a unique value proposition to differentiate the business."

According to Turock, a chain that wants to "Wal-Mart-proof" its business "no longer has the option of being the low-cost operator once Wal-Mart comes to town," nor can it be successful trying to appeal to the broadest market to drive massive volume.

"The conventional thinking that a chain needs to stay 'plain vanilla' to have broad customer appeal runs the risk of creating homogeneous stores that are customer irrelevant," Turock noted -- "a painful lesson Safeway endured when it attempted to fit specialist acquisitions Tom Thumb, Dominick's and Genuardi's into the Safeway generalist prototype store."

Among Turock's suggestions for chains hoping to Wal-Mart-proof themselves:

Develop replicable modules of dedicated store formats to target shoppers, as H.E. Butt Grocery Co. is doing with its upscale Central Market or as Albertsons is doing with its Hispanic-oriented format.

Be the leader in setting the standard for competitors to follow, as Publix Super Markets does in developing a culture of exceptional customer service.

Impact the supply chain and cost structure, as Ahold does with global sourcing; as Weis Markets and H-E-B do in buying their own land and renting space to retail tenants; or as Giant Eagle does serving as a wholesaler to its own stores and independent operators.

Grow the market, as Safeway, Ahold and Albertsons have done with online services; as Tesco has done by branching out into financial services, insurance, utilities, travel and other services; and as Stop & Shop has done with non-traditional home departments, greenhouse centers and party goods centers.

Maximize strong core markets, as H-E-B has done by knowing local consumers, using familiar store brands and leveraging its distribution infrastructure.

Independents seeking to compete successfully with Wal-Mart need to become specialists by targeting different customer segments than the chains and offering distinctive products, services and shopping experiences, Turock said.