In Minnesota, the Star Tribune reports that Supervalu, having transformed itself via its acquisition of much of Albertsons into a “retail powerhouse” of more than 2,500 stores, plans to, “pea by pea … take stock of the 10,000 to 12,000 products sold under 100 or so company-owned labels and eliminate brands that don’t measure up.
“That means tests on a wide array of products sold as supermarket versions of national labels; everything from canned vegetables to foam cups, vitamins to whiskey … The result should be a slimmed-down catalog of 20 to 25 store brands, said Ryan Briggs, Supervalu’s director of product development. ‘We want to focus more on branding, and less on just getting a product out on the shelf to sell it,’ he said during a recent tour of the new test kitchen.”
The goal of the effort – and the new testing facility – is to change behavior so that Supervalu promotes its brands in the same way that CPG companies treat their brands, and hence drive a higher percentage of sales to a segment in which the company can derive a greater profit. However, the company also understands that to justify consumer attention and loyalty, its various private labels have to achieve a high level of quality.
“That means tests on a wide array of products sold as supermarket versions of national labels; everything from canned vegetables to foam cups, vitamins to whiskey … The result should be a slimmed-down catalog of 20 to 25 store brands, said Ryan Briggs, Supervalu’s director of product development. ‘We want to focus more on branding, and less on just getting a product out on the shelf to sell it,’ he said during a recent tour of the new test kitchen.”
The goal of the effort – and the new testing facility – is to change behavior so that Supervalu promotes its brands in the same way that CPG companies treat their brands, and hence drive a higher percentage of sales to a segment in which the company can derive a greater profit. However, the company also understands that to justify consumer attention and loyalty, its various private labels have to achieve a high level of quality.
- KC's View:
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Differentiation isn’t just a matter of have unique products. It is far more important to have quality products that people can't get elsewhere.
“Retail powerhouse” is a nice enough term, but the folks at Supervalu seem smart enough to know that such appellations can be fleeting…that you have to continue to earn that description every day.
It seems to me that there isn’t a long distance between “retail powerhouse” and “really big company.” The latter is what Supervalu doesn’t want to end up being.
