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Supermarket Slide: Down 15 Points in 11 Years

Supermarket Slide: Down 15 Points in 11 Years

The Wall Street Journal reported on July 12 that “supermarkets’ share of U.S. grocery sales fell to 51% in 2011, down from 66% in 2000, according to UBS.”

The story — entitled “What’s Wrong with America’s Supermarkets?” — suggests that one reason is that major discounters Wal-Mart Stores [5] and Target Corp [6]. are using food to lure shoppers into their stores to buy other goods while they are there, or that shoppers are searching out cheaper food prices in other channels.

Both are true, but until supermarket retailers wake up to realize that shoppers are looking for something more, the slide of share will continue.

There are supermarket retailers like Kroger Co. [7], Publix Super Markets [8], Whole Foods Market [9], Trader Joe’s [10] and Wegmans Food Markets [11] (to name just a few) that continue to grow in sales and customer count. And it is simply because they choose to understand their shoppers better than the competition, and evolve with that knowledge.

Running a supermarket chain is difficult business. For many operators, what’s wrong with America’s supermarkets is the quarterly pressure from Wall Street that is unrelenting as are the constant pressures from unions, rising food prices, government regulation and environmental challenges. The desire to put the customer first may exist, but the daily demands of the food retailing business may interfere.

This 15-point share slide should be a wake-up call to every employee at every supermarket. Shoppers want a great food experience. Yes, prices are important; however, in looking at the retailers who are growing they have one important commonality — people enjoy shopping at their stores and they keep coming back.

We must have a balance between a quality shopping experience, building a relationship with shoppers, quality foods and offering value (not necessarily the cheapest prices).

Layoffs are not the answer; better customer-service training and knowing how to listen to shoppers keeps us on the path to success.

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