business news in context, analysis with attitude

We wrote yesterday that as gas prices go up, it seemed like a good time for retailers to adopt consumer-driven campaigns around the theme, “We’re all in this together.”

Such a campaign could offer consumers advice for how to achieve food luxuries on a budget…save money by using Internet shopping options…and provide a wide range of advice for how to be smarter shoppers. The main driver would be value, not price…though sharp prices on some items (especially certain private label products) would be part of the approach. But the message would be a compelling one to the consumer: “We’re on your side.” It would resound in advertising, in-store promotions and signage, and even in the attitude of store employees and an increasingly visible management.

One MNB user was, to put it mildly, less than impressed.

I can't even finish reading your first article this morning Kevin. I can't get past its startling resemblance to the Terry Garr's ad campaign from the movie, "Mr. Mom". I'd love to prattle off the exact quote for you, but it's just out of grasp. Something about 'we're in this together... and until this crisis is over we're lowering the price of our tuna by 50 cents a can... because we're the tuna with a heart."

Maybe we’re wrong about this, but we would suggest that not enough retailers are perceived as being on the consumer’s side. There are some – Wegmans, Ukrops, and HEB come to mind. That’s certainly what Giant Food was trying to communicate to shoppers with Odonna Mathews’ three-decade long tenure there as consumer advocate.

We’re not sure that this is a sentiment believed in enough retail headquarters and communicated by enough retailer to consumers.

On the subject of marketing to aging baby boomers, one MNB user wrote:

Amen brother! I just turned 49 and am now keenly aware of the condescension factor. Marketers need to realize that consumers don’t suddenly become nursing home candidates the instant their chronological age brands them as “senior.” I for one have been working out regularly since my 20s. As I stare down the barrel of 50, I figure it’s the only way to go into true old age—with as much physical and mental strength as possible. My workouts may have changed over the years, but not my resolve to grow more fit, age notwithstanding: I now do stuff like cardio and Pilates as well as weight training instead of just goofy jump around-the-room aerobics (like Jane Fonda’s old tapes). And, I buy a LOT of supplements and organic foods. Read the writing on the wall people—there are some big bucks to be made in this area because you have a built-in consumer base (us ubiquitous “boomers”). Think how much more you could rake in selling it to us intelligently.

We ran an email yesterday from MNB user Bob Vereen about his disappointment in a local Save-A-Lot store, which prompted MNB user Brad Morris to respond:

I understand where Mr. Vereen is coming from, but he is making the same mistake that everyone in our industry seems to make: judging an entire retail operation based upon the one store that is close to our house or office. Save A Lot is not as new as everyone seems to think. They were just never noticed because you wouldn’t find one in the neighborhoods where food executives lived and worked. They weren’t near the airports or the sales offices or the downtown or the convention center. They weren’t in the suburbs. They were the well-known secret. They are the jewel in Supervalu’s crown.

While Aldi seemed to exist primarily in more metropolitan-fringe areas, Save A Lot’s bread and butter always seemed to be the small town. That is why I find their foray into major cities so very interesting. Save A Lot is not Aldi. Aldi is 100% corporate owned. Save A lot is comprised primarily by independently owned and operated licensees. You will see as many different Save A Lots as there are owners. While they all carry similar merchandise and try to follow a corporately-designed merchandising program, one might be in a newly constructed, dedicated facility while another is in the space vacated by an independent grocery store driven out by Wal-Mart. I have even seen Save A Lots with a “Ben Franklin”-like 5&10 attached, kind of a small-town rural precursor to one-stop shopping. For every messy store is one that is perfectly clean and well merchandised. The Save A Lots I have seen tended to have slightly more merchandise than an Aldi, and while still dedicated to their own brands had a greater variety of national brands available compared to Aldi.

On the other hand, Save A Lot and Aldi are more similar than they are different. They are similar in much the same way that a Kroger is similar to a Safeway is similar to an Albertsons. How many times have you seen two food retailers sharing different corners on the same intersection and both are making money? I can vividly picture many Chicago intersections with a Jewel/Osco on one corner and a Dominick’s on another. Why not Aldi and Save A Lot? Competition is good.

Neither Aldi nor Save A Lot will destroy the other. A key to their continued success is the fact that you could put either format down in a Wal-Mart SuperCenter parking lot and they would do just fine. In a country where the cost of essential services continues to raise (how about them gas prices?) and the number of families living in poverty continues to grow, there is more than enough room for both of them. I wish them both well. They both sell good quality products at low prices to underserved shoppers.

In a world where the “Big-middle” retailers have left the cities because they couldn’t operate profitably I am glad that Save A Lot is coming in to offer people some goods they can afford and the opportunity to shop in their own neighborhoods with a little dignity.
KC's View: