business news in context, analysis with attitude

I got some very different reactions to yesterday’s NGA coverage, in which I suggested that one session talked about how to compete with “alternative formats” by making 10 recommendations (better produce, variety, employee engagement, etc...) most of which could have been made 20 years ago.

One MNB user who was in the room wrote:

I think the breakfast session yesterday on “how compete against non-traditional formats” was very good.  Was there much that was new or different, perhaps not.  But I question how many of those retailers in the room are actually incorporating the top ten recommendations mentioned in this presentation ... So while many of the recommendations may not be new, I’m not sure how retailers are actually listening.  I often find them to be way too operations focused, rather than consumer focused.

But another reader offered:

To read the NGA’s suggestion of ten ways to “win” the competition with non-traditional formats made me cringe. And you are spot on in your observation that “many of the retailers liked the presentation because it made them feel good about the tactics they are using to combat non-traditional formats.

The fact is that most mainstream grocery retail chains performance in these areas is weak, if not appalling, compared to many best in class examples. Most bakery departments are content to produce cakes from the 1970s and the same ready-bake bread SYSCO has been pitching for decades. One major retailer seems to believe employee engagement is about thanking the customer by name after clumsily looking at the receipt. They still call me by my ex-wife’s last name (my last land line was in her name and I use the phone number for my loyalty ID).

Event merchandising rarely moves beyond the level of inviting local beer distributors to set up 12 pack boxes in the shape of a field goal during the playoff season. Oh, and why not drop a potato chip display there? My local Kroger banner regularly fills the front of store displays with things like motor scooters, hot-tubs, foosball tables and BBQ grills. My friends try to guess what bizarre stuff will show up next.

Very few meat departments do much more than repackage the decidedly average quality product. One local grocery chain put in a small meat cooler with “fancier looking” cuts of meat, but  the counter closes at 5pm when the department manager leaves.  Visiting retail grocers around the country, I find that 75% of the time if I ask for skirt steak they either look confused or tell me that they cannot even order it.

Of course there  are always exceptions, but the bottom line is that these retailers are delusional if the believe their current performance—as a class—in these areas will differentiate them from any competition.

Let me make one more point about this ... that the very phrase non-traditional formats is antiquated, anachronistic and retailer-focused, as opposed to being focused on the consumer experience.

Shoppers don’t think that way. Dollar stores, convenience stores, superstores...none of these are “non-traditional formats.” They’re just places where people can get what they want and what they need.

The very idea that a grocer would think of himself or herself as “traditional” is a mistake. It buys into an old-world way of thinking and behaving. And they ought to ban the whole concept of “traditional; formats” and “non-traditional formats” from their vocabulary and way of thinking.

KC's View: