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Preparing Supermarkets for 2009's Roller-Coaster

Preparing Supermarkets for 2009's Roller-Coaster

When Michael Cullen founded the modern supermarket concept at the beginning of the Great Depression, his intent was laid out in this comment: “These are tough times, and I am on the level when I say I will do more than any other man in this country to save the American people money. I am making it possible for hundreds of thousands of people to get all they want to eat.”

See any relevance to today's times? Absolutely. So it's not surprising that present-day consumers also would consider supermarkets a central tool in getting through this severe downturn. Cullen, who founded King Kullen, melded self-service, convenience and affordable pricing into a coherent package that's still relevant. So today, at a time when many industries are going to great lengths to convince consumers of their value proposition, supermarkets are already recognized for their value and assortments. Grocery retailers have tried to further capitalize on this foundation in recent months with all kinds of promotions, but they will need to do even more in 2009.

This issue of SN, our annual Strategic Planner, provides a roster of clever strategies to pursue in this economy, ranging from value merchandising to hi-tech marketing. Here are a few timely ideas that appear in stories throughout this issue:

  • Starting with the tech side, Haggen, which operates in Washington and Oregon, has created a program aimed at increasing purchases by secondary shoppers. Called Top Connection, it represents a new customer relationship-building effort that does not supplant the chain's existing loyalty initiative. Top, which identifies customers through a plastic RFID keychain link at the POS, provides special shopper benefits ranging from a seven-day discount guarantee to email or text-message alerts for new products or recalls.

  • Staying with the tech angle, another story this week highlights how a wide variety of retailers are embracing digital coupons. This includes Kroger's online programs, among which is one that involves cell phones. Giant Eagle has an initiative in which coupons can be loaded for free onto its Advantage Card.

  • Good strategies don't have to be high-tech to be successful. The concept of promoting bargain-priced DVDs gains new importance in this economy. One observer recommended a family movie night package that would include a DVD rental, a 2-liter soft drink and popcorn.

  • Meanwhile, the supermarket prepared foods department should be evaluated for upgrade or expansion now that consumers are looking to retail for meals formerly obtained through restaurants. There is an important caveat: Retailers should stick to basic, proven meals rather than take big risks with upscale or offbeat fare.

  • Finally, there's a strategy that impacts supermarket companies more than consumers. The slumping real estate market creates opportunities for some retailers to purchase locations that are currently leased. This potential cost-saving effort is appropriate for companies that have ready access to capital.

  • Consider this week's Strategic Planner a menu of options, rather than a uniform to-do list. Supermarkets — like their customer bases — are highly individualized and have different needs, although these days most of their activities relate to the economy, either directly or indirectly.