LAS VEGAS — Restaurant-quality, healthy and convenient meal solutions are the staple of Supervalu's vision for the future.
The retailer/wholesaler's executive vice president of merchandising and marketing, Duncan Mac Naughton, outlined the strategy during the session “Changing the Game: Turning the Dining Room Lights Back On.” It was part of Information Resources Inc.'s 2007 Summit held here last month at the Wynn Las Vegas.
“Seventy-three percent of our revenue is derived from stores that are either No. 1 or No. 2 in their market,” Mac Naughton said. “We think this serves as a great opportunity to shape the way that consumers think about food.”
The retailer/wholesaler more than doubled its retail footprint, growing from 1,200 to 2,500 stores, when it acquired Albertsons last June. The move shifted Supervalu into the No. 3 U.S. food retailer slot behind Wal-Mart Stores and Kroger. The wholesaler services an additional 2,500 independent grocers.
“Our chairman challenged us to become the best place to work, shop and invest,” said Mac Naughton. “It's easy to say, but not easy to do. But we do have the foundation to make it happen.”
In addition to focusing on “developing store formats that people love,” Supervalu — which operates banners ranging from super-premium Bristol Farms to its extreme-value, limited-assortment Save-A-Lot stores — is working toward strengthening its company brand while leveraging its scalability.
Customer-centric marketing and merchandising strategies are an area of concentration where research is playing a large role.
“We talked to restaurateurs and found out that when they drive down the street between the hours of 5 and 7:30 p.m. and see dining room lights on, it infuriates them,” said Mac Naughton. “We want to get consumers to turn their dining room lights back on. When they go out to eat it's a completely different experience, and retailers haven't made [eating] at home easy for them.”
According to Supervalu's research, one-third of consumers surveyed consider supermarkets a viable option for food-to-go, while 53% purchase prepared foods when they're in a hurry, 51% seek foods that can be prepared in 30 minutes or less, and 40% eat on paper plates.
To help gauge the quality of the meals shoppers are eating at home, the retailer gave a group of consumers disposable cameras and asked them to take pictures of all the food they consumed, either at home or in a restaurant, during a two-week period.
“One customer went out to eat on Saturday morning for breakfast and their picture shows eggs, bacon, sausage, toast and coffee,” said Mac Naughton. “Then we compared that to the breakfast they ate at home: a cold pop tart. In another instance, lunch at a restaurant was prime rib, while it looked like two pieces of stale bread with some ham slapped between it at home.”
Mac Naughton encouraged attendees to help pull consumers out of their food rut.
“We need to teach people how to eat, like maybe, for example, tell them that Tuesday is taco night,” said Mac Naughton. “Consumers usually rotate the same six or seven meals, so we need to expand their horizons. A family member might say, ‘Wow, that meal is awesome,’ and then that additional food item might be added to the rotation.”
Fresh, healthy and convenient restaurant-quality meal solutions like those grouped in merchandising units identified as “The Salad Place” have lifted Supervalu's sales substantially, noted Mac Naughton.
“Items that we may have only sold one or two of, we're now selling cases of,” he said.
Components of meals like grilled Asian sesame chicken salad, for instance, are cross-merchandised in areas like these.
“Normally it would take a customer 25 minutes to visit eight areas in the store to collect all of these ingredients that we've now put together in a single place,” said Mac Naughton. “People want prepared, assemble-and-serve or heat-and-eat meals. Customers want taste, convenience and components, not ingredients.”
Supermarkets are competing with restaurants like Applebee's and Outback Steakhouse that offer consumers curbside food-to-go, he noted.
“They give you the plates, cups and everything you need to have that meal, and they bring it right to your car,” Mac Naughton said. “We've got to start putting foods out front and changing the accessibility of food-to-go.”
Supervalu is also taking the mystery out of seafood preparation, an obstacle that, Mac Naughton noted, prevents many shoppers from eating seafood at home.
“In restaurants, it's all about wild foods, so in our seafood departments we can tell the story about where it was caught, its journey from sea to plate and let them know how to prepare it,” he said. “Pair that seafood with a great wine and you're the hero of their night.”