It’s good to be in the food biz today. For one thing, everyone has to eat. Then, there is the recession that means more at-home eating and, in fact, eating as entertainment.
Speaking of which, “food as pornography” is a viral message out there these days, thanks to the ever-irreverent Anthony Bourdain (Yes, that means you’re guilty if you send friends photos of your meals.) Let’s face it, food is just plain fun (especially if you’re not actually going hungry.)
It’s also big money. Supermarket News recently announced the annual ranking of its Top 75 U.S. food retailers and wholesalers who, for the first time, topped the $1 billion sales mark. While some of this increase is attributable to inflation, much of it is due to acquisition strategies.
One of the nice surprises in SN‘s “Top” list this year was the first-time addition of Sprouts Farmer’s Markets (#68), whose recent buyout of Phoenix’s Sunflower Markets was the result of many years of planning for this savvy home-town company. It’s good to see the smaller operators join the big leagues. Fresh & Easy also appears to have overcome its challenges (chief among them of adapting British concepts and style to America) to join the list for the first time as #75.
Of the big boys, merchandising wiz Target also joined the food winners for its first year because of its new P-fresh concept, which, while low on assortment, is high on enthusiasm. Costco jumped to #3 to reaffirm its hold as the club category killer, with license to thrill.
Large fish eating small fish is as old as time, and gaining market share via M&A is standard practice. But that strategy is mostly about satiating hunger and not about being special. That takes a different sort of metrics, and that’s where the industry awards come in.
This year, SN voted for giant Ahold USA (Stop & Shop, Giant-Landover, Giant-Carlisle) as Marketer of the Year by “providing value and enhancing the shopping experience”. One of their big winners is their huge private-label program, and they are committed miners of consumer data to leverage promotions.
At about the same time SN announced the supermarket supers, J.D. Power & Associates (of auto industry fame) put out their Customer Service Champions Study. So while SN‘s ranking is based on numbers (quantitative), JDP’s is based on consumer opinion (qualitative.)
Acording to the study’s Executive Summary, winners at retail focused on four key areas: people, presentation, process, and price. Importantly, they measured responses in tables that correlate to conversion and retention: things dear to the heart of every retailer.
This year’s selection of Publix (Southeast) and Wegmans (Northeast) as Champions in the supermarket sector was no great surprise, but it was interesting that they were the only two food chains selected from 50 winners (out of 800 companies) in varying industries. Given that most of us buy food in supermarkets as opposed to, say, iPads at Amazon, it seems more chains should have made the cut.
That’s not to say these winners are not notable: to the contrary. Publix has long been a favorite in the Southeast, and folks who move from the region still get misty-eyed when talking about the stores. (One of the nicest things they do is hire senior citizens as ambassadors) while Wegmans is almost a religion in the Northeast.
Concurrently, Wegmans and Publix were also recently named by Fortune magazine as one of the 100 Best Companies to work for. This is the 15th consecutive year Wegmans has been listed and means they walk the talk, such as living a “work-life” balance. They set out to show that happy employees means satisfied customers.
While it’s a good thing these chains were honored, it’s too bad only a few Americans will ever shop in them because they’re regional. So, while they may hunger for the human hand of a Publix or the superior service of a Wegmans, many just don’t have a choice. They may frequent a chain because it’s the only game in town, but that doesn’t necessarily mean they’re thrilled with it.
As we noted in earlier posts, customers crave deals, but they’re also hungry for intangibles that these JDP and SN award-winners provide: the feeling that you’re on a special adventure. It just goes to show that feed the soul, and the stomach will follow.
Filed under: global marketing, marketing strategy, Shopping behavior Tagged: | Ahold, Costco, customer service, food industry, Food Network, Fortune 100, Fresh & Easy, market research, Publix, shopping, Sprouts Farmer's Markets, Supermarket News, supermarkets, Target, Wegmans Food Market