ATLANTA -- The arrival of a supercenter doesn't have to mean a death knell for the independent supermarket.
Speakers at the National Grocers Association's annual convention here last week outlined a prescription that independents can use to successfully head off supercenter competition. Among the key elements are: · Staying price competitive, but not necessarily outdoing supercenter pricing.
Expanding store space.
Adding perimeter service departments.
Focusing on employee morale.
"When you compare supercenters to some of our smaller operating units, they certainly have us outhorsed," said Carl McMillan, general manager of Town & Country, a 21-unit operator based in Hardy, Ark. "That does not mean that there is not hope for the small independent operator. You've got to have the square feet in your stores to compete, and you have to make a dedicated effort to
put out the finances to do that."
Both Town & Country and another independent, Springdale, Ark.-based Harp's Food Stores, recently invested in expanded stores when faced with an influx of Wal-Mart Supercenter competition. Harlon Earp, vice president of human resources at Harp's, which operates 25 units in Arkansas and Oklahoma, said his firm nearly doubled the size of one store to 100,000 square feet.
Both operators devoted much of their new space to consumer-friendly services. Harp's added food courts and fresh sea food departments while Town & Country added delis and bakeries.
Expansion at Harp's was accompanied by an emphasis on promoting quality. The retailer used aggressive in-store displays and even print advertising to tell consumers its meats and produce are superior to Wal-Mart's offerings, Earp said.
"We took advantage of everything we had in terms of quality over Wal-Mart," said Earp.
Although neither operator advised against attempts to undercut Wal-Mart's prices, both retailers emphasized the importance of remaining price-competitive.
"The most important thing that you can do is check your retails to make sure that you're competitive on those sensitive items and items they have on display," McMillan said.
Earp agreed, saying that Harp's runs in-store price comparisons that underscore pricing equivalences.
"We didn't want to make claims that we're going to be cheaper than Wal-Mart, because that's not going to happen," said Earp. "We wanted to prove that we could be just as cheap."
Both operators stressed the importance of maintaining employee morale in the face of a supercenter's arrival.
"If you don't stay on top of that, they'll get so low that they'll run off the rest of your customers," McMillan explained.
