CHICAGO -- The industry must develop solutions to a series of "performance gap" issues if it hopes to hold onto the customers it already has, Margaret McEwan, vice president of consumer services and quality assurance at Shaw's Supermarkets, East Bridgewater, Mass., said here last week.
In remarks during the State of the Food Marketing Industry: Speaks '97 presentation at Food Marketing Institute's annual meeting, McEwan offered suggestions on how the industry can dispel consumer concerns about pricing, personal safety, faster checkouts and accurate shelf tags -- four issues on which supermarkets are failing to meet expectations, according to FMI studies.
Those studies, which were cited at the session, showed that 77% of respondents said they consider low prices important, while only 30% said supermarkets were delivering low prices -- a performance gap of 47 points; 70% said personal safety was important, but only 25% thought the industry was doing a good job (a 45-point gap); 70% said fast checkout was important, but only 28% felt the industry's performance was good (a 42-point gap), and 77% were concerned with accurate shelf tags but only 36% said the industry was providing them (a 41-point gap).
Addressing each issue separately McEwan made these observations:
Pricing. "Consumer complaints about prices are clearly a misguided perception. But the industry contributes to it by competing so intensely on the basis of price, which creates a powerful expectation. "And we as an industry change prices so frequently and offer specials, coupons and double and triple coupons, that the consumer becomes confused over what the price should be. "This will become an even bigger challenge as the industry goes more into home-meal replacement, as consumers expecting low prices from the supermarket may be reluctant to pay a premium for a well-prepared meal at the same place where they buy their bread for next to nothing. "However, it's encouraging that so many economists and policy makers are questioning the accuracy of the Consumer Price Index, which most experts agree overstates inflation. That's one opportunity we can use to address this issue. And we can also be more proactive with the news media."
Personal safety. "Companies are upgrading the lighting in their parking lots and putting numbers on parking lot lights so consumers can find their cars faster. And more companies are helping customers bring their groceries out to cars, and supermarkets are having more security officers in the stores, not just to guard against shoplifting, but to show concern for public safety.
"In Cincinnati, Kroger let the local police set up a precinct in a store, and why not? It adds to the overall image of the supermarket as a center of the community, which isn't an asset that we should take lightly."
Checkout lines. "The front end is one area where the industry cannot afford to cut labor -- especially if we are to increase our share of the home-meal replacement market, made up largely of people whose most precious commodity is time."
Noting FMI studies that show 41% of shoppers spend up to five minutes in line and another 37% spend five to 10 minutes, and also that one-third to one-half of a 30-minute supermarket visit can be spent in the checkout line, McEwan said, "The best strategy to combat this age-old challenge is to make sure all your checkout lines are open, with packers available during your busiest hours.
"Nothing annoys a customer more than waiting in line and seeing three or four inactive checkout stands.
Accurate shelf tags, which remains a consumer concern despite a Federal Trade Commission study cited by the FMI that shows supermarket overcharges of just 1.92% and a lower error rate among supermarkets (3.47%) than among nonfood retailers (5.54%). "Every company should be aimed for a 100% accuracy rate, and the data from the FTC and other sources show we're making significant progress," McEwan said. "But if a customer discovers an error in pricing accuracy, it doesn't matter to that individual what the industry claims the average to be."
In her talk McEwan also complained about the government requirement to check ID's for all cigarette buyers under age 27, "which has lengthened the waits in checkout lanes.
"Of course we don't condone selling these products to minors, but this type of carding requirement conveys a message, to even our most loyal customers, that we do not recognize them. And we've been forced to deny sales to people who are of legal age, simply because they forgot to bring their photo ID.
"This type of government interference is not only absurd, but it also does a disservice to our customers, and the rule definitely should be eliminated."
McEwan also discussed the need for human input into assortment decisions "because new techniques such as category management, which are designed to fine-tune assortment, may lead us to overlook ethnic needs.
"If you are in a community where 20% of the population is Hispanic, your computer model may show that 80% of your bean sales are coming from loyal shoppers buying the baked variety, so you may choose to limit your assortment to baked beans and not give enough space to chickpeas.
"That decision may look great according to the computer model, but it may drive out your Hispanic customers, who eat chickpeas regularly. And you may also lose other shoppers who are developing a taste for ethnic foods. "So we cannot rely solely on technology to make assortment and marketing decisions. We have to supplement that with listening to what consumers tell us when they inquire about new products and complaint about our failure to stock certain items."
McEwan also cited the need "for basic human respect and courtesy" in dealing with consumers who make complaints. "Remember, customers are doing us a favor when they take the time to point out how we can improve our business, and customer retention is much more profitable for the business than the minimal expense it might take to resolve an issue satisfactorily for the customer."
She suggested that retailers follow through on customer complaints and call the consumer to make sure the problem has been solved. "So few merchants do that in this busy age that those who do can gain a significant competitive advantage," she said. Prior to introducing McEwan, Michael Sansolo, FMI group vice president of education, industry relations and research, and moderator of the Speaks session, discussed various consumer concerns surveyed in FMI's Trends study, including the following:
Most consumers still give their primary supermarket high marks for overall performance -- an average of 8.1 on a scale where 10 means supermarkets are doing an excellent job.
"But we found some unsettling demographic trends," Sansolo said, "with older shoppers tending to give supermarkets the highest marks while young and middle-aged shoppers -- the shoppers of the future -- are less likely to do so."
The survey showed that 52% of people aged 65 and older gave their stores a rating of 9 or 10, compared with 41% of respondents aged 50 to 64; 31% aged 40 to 49; 30% aged 25 to 39, and 37% aged 18 to 24.
Consumers said they have a positive long-range outlook, with 50% expecting their personal circumstances to improve in the next year, compared with 39% in 1994; 44% expecting circumstances to remain the same, compared with 49% in 1994, and 5% expecting things to get worse, compared with 10% in 1994.
Consumer Expectations Vs. Supermarket Performance
The FMI asked consumers what criteria they felt were very important for a supermarket to meet. Then, consumers were asked whether their supermarkets did an "excellent" job of meeting those criteria.
Criteria RANKED VERY IMPORTANT Performance Gap EXCELLENCE RATING
Clean, neat store 91% -37 54%
High-quality produce 91% -39 52%
High-quality 86% -39% 47%
Courteous, friendly 82% -34 48%
Use before/sell-by date marked 82% -36 46%
Accurate shelf tags 77% -41 30%
Low prices 77% -41
Convenient location 75% 47 58%
Fast checkout 70% -17 28%
Personal safety outside store 70% -42 25%
-45
NOTE: Performance gaps are calculated by subtracting percent rating performance as excellent from percent ranking item as Important.
Source: Food Marketing Institute, Washington, "Trends in the United States -- Consumer Attitudes and the Supermarket, 1997."
Overall Satisfaction With Primary Supermarket
The FMI asked consumers to rate, from 1 to 10, their satisfaction with their primary supermarket, with 1 being the lowest rating and 10 the highest.
Average Rating (1 to 10scale) % of Consumers Rating Supermarkets 9 or 10 (chart)
Time of Average Shopping visit
30-60 minutes 48%
60-120 minutes 21%
More than 120 minutes 2%
Less than 15 minutes 5%
15-30 minutes 24%
Time Spent Waiting in Line
5-10 minutes 37%
10-15 minutes 15%
15-30 minutes 6%
30-60 minutes 1%
Less than 5 minutes 41%
Source: Food Marketing Institute, Washington, "Trends in the United States -- Consumer Attitudes and the Supermarket, 1997."
