business news in context, analysis with attitude

Business Week reports on how old-line supermarket operators are competing with the supercenters that are being built by companies such as Wal-Mart and Target.

“Despite the intensifying competition, the retail-food environment looks to be stabilizing,” Business Week writes. “Industry operators' first reaction to increased competition from low-priced supercenters was to cut costs while aggressively lowering prices.

“But these efforts -- which included renegotiating union contracts, implementing cost-saving initiatives, and investing heavily in promotions and advertising -- are only a first step. These retailers have come to realize that in order to succeed, they will need to put more effort into diversifying offerings to better meet their customers' needs. So they're expanding their selections of perishable offerings, ethnic foods, and gourmet foods.”
KC's View:
We just hope that no retailers have been waiting for Business Week to issue these instructions before focusing on creating differential advantages for themselves.