SUPERMARKETS ADVISED TO KEEP CUSTOMERS ENTERTAINED

CHICAGO -- Grocery store operators need to make the shopping experience more entertaining for consumers, and labor unions have an obligation to help, an ACNielsen executive told a seminar here at last week's Food Marketing Institute annual convention."The labor unions need to work with their grocery partners to come up with agreements that make sense," Todd Hale, senior vice president, consumer insights,

CHICAGO -- Grocery store operators need to make the shopping experience more entertaining for consumers, and labor unions have an obligation to help, an ACNielsen executive told a seminar here at last week's Food Marketing Institute annual convention.

"The labor unions need to work with their grocery partners to come up with agreements that make sense," Todd Hale, senior vice president, consumer insights, said. "They came up with lower pay for new hires on the West Coast, and they've got to work with retailers on training and other programs that will help improve the shopping experience."

In a talk focusing on the loss of market share by supermarkets to other distribution channels, Hale said it's imperative for supermarkets to find ways to keep more consumers from shifting to other retail outlets. "There are a lot of opportunities to improve the shopping experience, but retailers need to understand who they are and what they want to be and then differentiate themselves with the kind of stores they want to operate and the kind of customers they want to attract."

Among his suggestions:

Strengthen the stores' perimeter area by making meal solutions a No. 1 priority. "Grocery stores are in business because they provide food," Hale said. "When you go into a Hannaford store, for example, you know it's a food store.

Maintain good service levels. "That's an area where many retailers are cutting back, but it's one way of differentiating a store from other distribution channels," he explained.

Do more in-store sampling. "Sampling will make big food days more fun to shop," Hale said.

Add more nonfood items, "but don't overwhelm the grocery offerings."

Develop store-within-a-store sections.

Tailor formats and store offerings to local needs.

Add more services, such as gas stations, pharmacies and banking, "and keep them coming."

Hale said retailers are beginning to use data mined from loyalty cards in more creative ways. For example, he said Harris Teeter is using sales data to e-mail shoppers when the brands they have purchased previously are on sale.

"One negative aspect of data mining is, it only tells you what's going on in your store but not what's going on with your competitors," Hale said. "The smart companies are figuring out how to use the data to see what they're losing to those other channels."

Asked whether it would help grocery retailers if they add dollar aisles, Hale replied, "It's OK, but I doubt it will produce big numbers because dollar stores are a smaller segment than other distribution channels. Supermarkets would do better to focus more on what the clubs are doing because that's a bigger channel."

On the other hand, Hale said more dollar stores are beginning to test grocery sections in locations that are not near supermarkets or supercenters, "and that will provide shoppers with convenience and nibble away at both grocery stores and supercenters."