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The Oregonian reports that supermarket shoppers “have locked into new habits, rolling their carts into an ever wider array of food stores at either side of the retailing spectrum. At one end, they steer toward lower prices at big-box discounters: Costco Warehouse, WinCo Foods, Wal-Mart Supercenter, SuperTarget. At the other, they search out upscale and organic offerings at specialty stores, from Portland based Zupan's Markets and New Seasons Market to national chains - Trader Joe's and Whole Foods Markets.

“Trapped in the middle, the national one-size-fits-all chains can't afford across-the-board discounts or to reserve space for shelves full of balsamic vinegars, such as Zupan's $149.99 cask of a 30-year-old varietal. But in recent months, the middle-of-the-road operators are mounting their strongest, most visible counteroffensive.

“Boise-based Albertsons is spawning a line of no-frills, cut-rate, bag-it yourself stores called Super Saver, not yet rolled out in Oregon. Safeway has aimed upscale, adding wood floors and subdued lighting, along with European cheese tables and ready-made meals of crab cakes and rack of lamb.”

The dichotomy of the modern shopper works against the mindset that always has been the specialty of the chains – a one-stop shopping approach that is relentlessly mainstream. They are finding out that being in the mainstream often means being adrift – and that they have to make a choice as to which shore they find more appealing and profitable.

The goal is to shore up eroding numbers indicating that consumers are visiting supermarkets less often than ever before, and spending their money at so-called “alternative formats.”
KC's View:
We actually think that the term “alternative formats” ought to be retired. Everybody ought to want to be the better alternative.

The hard part for some national chains is that they are used to marketing to the masses, but the mass tastes have moved away from them. On the one hand, discounters have taught them that there always is a lower price on commodities, a lesson that was more valuable during the uncertain economic climate of the past few years. And they’ve also become more educated, at least in a superficial sense, because of the influence of the Food Network and all the various magazines and cookbooks that have hit the market. This education means they are looking for products that differentiate them from their friends and neighbors…and are looking for stores that are themselves differentiated.

We were in a wonderful Pick ‘n Save Metro Market last night here in Milwaukee that we thought was doing a terrific job of communicating its differences to consumers – a great décor package with a tasteful Tuscan influence, expansive fresh food departments that were colorful and well-staffed with apparently friendly people engaged in customer conversations, and a nicely laid-out grocery section that seemed to do a nice job of emphasizing some of the different products available in-aisle. We liked it a lot – our only complaint would have been that more sampling would have been appropriate, especially at the dinner hour when there seemed to be a lot of customers hunting for the evening meal. (They were sampling some wonderful salmon croquettes, but there could have been a lot more.)

This Pick ‘n Save Metro Market struck us as being a store that has the balance right – it is a supermarket in the traditional sense, but is reaching for an approach that does not condescend or settle.

That’s an achievement.