LAS VEGAS -- Independent retailers are gearing up for the supercenter challenge.
While many operators don't yet face the giant Kmart or Wal-Mart supercenters, they said they would be able to offer advantages the large formats could not.
At the 1995 National Grocers Association Convention here last week, supercenters were an important topic and the subject of speeches at various sessions. Executives interviewed at the convention said independents did have an edge with:
Superior perimeter departments.
A devotion to customer service.
A commitment to keeping prices competitive with the sharply priced supercenters.
Efforts to upgrade store facilities.
In an address to the convention, Peter Gregerson, chairman of Gregerson's Foods, Gadsden, Ala., urged retailers to use their entrepreneurial spirit.
"No one here underestimates the threat of these Goliath-sized competitors," he said, "but Goliath didn't use the rock first -- David did. So we must find a better way to compete."
Independents interviewed by SN said they were thinking about ways to improve their competitiveness.
Ed Kessler, general manager of C&K Market, Brookings, Ore., said, "From our standpoint, the most important thing is to focus on the customer. That's what Wal-Mart has tried to do with its greeters in-store."
Kessler said his chain has
launched an employee training program covering all store departments.
Dee Winegar, president of Winegar's, Bountiful, Utah, said his firm was already facing Fred Meyer supercenter-like stores and might soon face Target supercenters.
"We are adding services, upgrading perimeter departments and trying to establish more of a niche," Winegar said. "We're more interested in worrying about what the customer wants than about what the supercenters will do."
Rich Bronson, president of Bronson's Super Valu, Belulah, N.D., said speeding up shopping should be a priority for independents.
"Supercenters can't provide fast shopping, which is what customers want today," Bronson said. "Independents should try to speed up that shopping experience to provide a contrast with the huge supercenters."
James Maxwell, manager of Morgan's Foodland, Kingwood, W.V., has two stores in a town of 3,000 people. Although a Super Kmart is being built just 25 miles from Kingwood, Maxwell said his biggest challenge is from chains like Food Lion. He said his stores would lose business only from customers who are already near the Super Kmart.
Lauer's Super Thrift, Pasadena, Md., has honed its competitive skills following a battle with an alternative format. "Price has been our biggest challenge," said Joe Millsap, manager. He said the chain improved its pricing competing with a 335,000-square-foot Leemark five miles away; the Leemark went out of business. Millsap said the European-based chain cut prices too low.
"We use our strengths in terms of offering service, and that seems to be able to keep a loyal customer base," Millsap said. He said it is important to be part of the community and donate to local causes.
Richard Rogers, manager of Geyer's Markets, Lexington, Ohio, said his operation competes with a supercenter, and the challenge is to attract customers with an up-to-date facility.
"We stay ahead in terms of our marketing and promotions," Rogers said. "We've been emphasizing our perishables. We also try to make things look different in our store."
Ralph Towery, grocery-liquor manager of Marketplace Foods, Minot, N.D., said the challenge his stores would face from a supercenter would be the "perceived image that they offer such low prices. We have to convince our customers that we have buying power and can give better service," he said.
Roger Larson, owner of Larson's Super Value, West Fargo, N.D., said although there aren't any supercenters in his area yet, he does compete with Sam's Club and Wal-Mart. "We can't compete with them on price," he said. "We've been in business 30 years and offer service. But service is not enough; we also have to have an updated facility and a good location."
Dan Lynch, manager of Ron & Lloyd's Family Food Store, Neenah, Wis., said, "The biggest challenge from a Wal-Mart supercenter is its sheer size and the variety it offers." Lynch said his store has become more price competitive and focuses on customer service and convenience.