Who would want to buy a supermarket company these days, anyway?
taken an increased interest in purchasing supermarket chains, including about a third of the stores operated by Albertsons, which has agreed to sell itself to Supervalu, CVS and a private-equity group led by Cerberus Capital Management.
That interest indicates that despite the phenomenal expansion of supercenters and club stores and the pervasive incursion of dollar stores and drug stores into food retailing, the traditional supermarket still holds value.
Although their market share is expected to continue to weaken against nontraditional competition, many traditional supermarkets are winning the battle for survival by focusing on localizing their offerings, rethinking their brand images and restructuring their labor contracts to be more competitive.
They are also developing new formats that target specific demographics, such as Publix's Sabor and GreenWise banners directed at Hispanics and the granola set, respectively, and they are tailoring their fresh offerings to meet the needs of niche markets (see Page 95). Some supermarket operators are rolling out supercenters of their own, as Kroger and H.E. Butt Grocery have done, to showcase their nonfood offerings (see Page 87), while others are enhancing the center store with more enticing displays (Page 129).
In addition, retailers are using technology to optimize their pricing and assortments (Page 133).
With the growth of price-centered formats and chains like Whole Foods Market that are making high-end and organic products mainstream, supermarkets in many cases are trying not to be left stuck in the middle without a clear point of differentiation or brand identity.
As Richard George, professor of food marketing at Saint Joseph's University, Philadelphia, told SN: "There are no longer markets for goods and services that everybody likes a little - only for goods and services that somebody likes a lot."