OSAGE BEACH, Mo. (FNS) -- An independent with superior customer service can compete successfully on supercenters, retailers attending the annual convention of the Missouri Grocers Association were assured.
This year's conclave covered the theme of survival -- with a number of speakers addressing the issue.
"Customer service is the key to your survival," warned Bill Lancaster, vice president of sales, Associated Wholesale Grocers, Kansas City, Kan.
Following a workshop on "Customer Service -- Your Competitive Edge," Lancaster told SN that even Wal-Mart Stores, "which does so many things right," has given short shrift to service. The company instead has focused on price and how to control costs, he said.
Importance of the service factor in dealing with consumers has spawned a series of eight-hour seminars at AWG.
Under direction of Steve Dillard, vice president of education and strategic planning, the one-day sessions have become increasingly popular as Wal-Mart accelerates its construction program in the Midwest, Dillard noted.
"Helping our retailers retain sales in the face of a new supercenter is a real benefit of the training," he said.
Launched about four years ago, the seminars, of which there are now five to 10 per year, cover topics ranging from front-end friendliness to handling consumer complaints. Sometimes the workshops are customized for a single retailer sending up to 40 employees, Dillard said. On other occasions, the sessions are open to a number of retailers.
"Very often, we drive customers away from our stores," AWG's Lancaster pointed out. "It's not a case of the competition pulling them away." Indifferent attitude by employees and managers is by far the main reason a customer stops shopping at a store, Lancaster pointed out.
"Look at every customer complaint as an opportunity," he said. "Handle each one with timeliness and efficiency. It costs five to 10 times more to get a new customer than to keep the customers you have."
Superior front-end service creates customer satisfaction, Lancaster told the group. "Greet customers with a smile -- and thank them sincerely. Give them undivided attention -- and find an answer to all their questions. Take them to the product they cannot find."
K-VA-T Food Stores, headquartered in Abingdon, Va., and operating primarily in Tennessee, Kentucky and Virginia, has learned how to survive the infiltration of 23 supercenters, said Steve Smith, keynote speaker, and company chief executive officer.
"We have positioned ourselves as meat specialists," Smith told the Missouri Grocers.
Capitalizing on the fact that the area Wal-Mart stores have gone totally to case-ready beef, K-VA-T in ads and in-store announcements tells customers that a professional meat person is on duty -- preparing ground beef daily.
Smith said that the firm's Food City stores have "five kinds of ground beef" and that the product is one of the "backbones of the store." Distribution has increased two or three points in the last few years, he noted.
Smith said, however, that grocery departments are flat -- "and we must work on that."
Employee retention is another important tool in surviving, Smith and other speakers told the audience.
"When a supercenter is coming in, we assure employees that we won't close any stores -- and we haven't."
K-VA-T also boosts morale by treating store managers and their spouses to free seats at NASCAR auto races, very popular in that area of the country.
Retention is especially important in the store manager category, according to Dan Hulitt of the Creative Management Institute at Supervalu, Minneapolis. He blamed 60- to 80-hour work weeks for job burnout. He suggested companies use co-managers instead, with each working 45-hour per week schedules.
Since previously reported studies show that it costs over $3,800 to replace hourly workers, some of that money could be spent for programs such as "Bucks For Buddies," Hulitt suggested. Under that plan, an employee gets $50 when a friend is hired and $50 additional for each six months that the friend stays employed (up to a maximum of $100).
"The present generation of employees wants to be heard," Hulitt said. "Don't ignore their opinions and ideas."
In job interviews, too, the table has been turned, the audience was told. Now applicants increasingly ask the questions -- such as, "How are you going to keep my skills sharp?" Hulitt pointed out.
At a workshop on "Winning in a Competitive Market Place," further optimism was expressed that independents at least have a chance in facing competition from supercenters.
"Wal-Mart will never let anyone take the price position from them," said Paul Adams, director of retail sales for Fleming, Dallas. "But if you can dominate other areas, the field gets more level."
Discussing some findings from a recent PricewaterhouseCoopers survey, Adams said 16% of all shoppers now use a supercenter as their primary grocery store. "Younger parents" comprise 36% of supercenter shoppers and thus are the "target customers."