Grocery shopping is happening in lots of places other than traditional grocery stores and supermarkets.
An article in today’s NY Times, entitled, “Big Retailers Fill More Aisles With Groceries ,” describes the increased competition that supermarkets are facing. For example, the article states, “Walgreens is devoting up to 40 percent of the space in its redesigned stores to fresh and frozen groceries as a test to see how well food sells. It offers items like cut fruit or sushi in office locations, and staples like lettuce, bananas and meat elsewhere”. In one store, “the food section looks like a gourmet grocery, offering six varieties of cage-free eggs, gnocchi, shitake mushrooms…“
CVS has also added larger grocery sections. My friend, Margot, often stops at a CVS on her way into work or on the way home….and it’s not just when she is going to the pharmacy! It is quick, and easy in, easy out unlike a traditional supermarket and the CVS rewards program that she benefits from is remarkable! Target shoppers know that Target has invested heavily in expanding its food offerings and not surprisingly, has seen its overall sales and traffic increase about 6% in stores where they have added new grocery areas.
So where does all of this leave the traditional or even non-traditional supermarket? Its customers are either picking up a few items while they are at the pharmacy or Target or Wal-Mart….or….their customers are headed to the pharmacy, Target or Wal-Mart instead of the supermarket. How are supermarkets responding to this sea change in competition?
What innovations and competitive advantage can the supermarkets bring that will bring customers back and bring them back more frequently?