INDIANAPOLIS - Three years after launching its "lifestyle" format, Marsh Supermarkets has begun applying some best practices from those stores to the center aisles of its conventional supermarkets.
The goal is to enliven the conventional Center Store departments while making them easy to shop. Marsh reversed the traditional supermarket model in its lifestyle stores, putting produce in the center and pantry and other fresh departments in the perimeter.
In its latest round of resets designed to freshen up its conventional stores, Marsh - which agreed recently to be bought by an affiliate of Sun Capital Partners - has been changing the way it merchandises specialty gourmet products and natural organic products.
Gourmet products had been embedded in various category sets. When it resets its conventional stores, Marsh centralizes those products into a single gourmet section. Special fixtures for the department support Marsh's image as a specialty food seller without necessarily increasing inventory, said William Loneman, senior vice president of merchandising for Marsh.
Marsh did the opposite with natural and organic products. Once in stand-alone sections, they are being integrated in its Health Style sections that contain products with a healthy component.
Loneman said initial concerns that integrating naturals and organics with other categories might cause sales to decline proved to be unjustified.
"We were afraid customers might feel it was harder to find natural and organic products if they weren't segregated, but we haven't seen any sales slippage," he said. "In fact, sales have increased slightly. It's been well accepted by the consumer."
Loneman said the retailer has completed six specialty gourmet and natural organic resets in its 69 Marsh-banner stores since last fall and hopes to have at least 20 reset by the end of this year. Twenty-nine Marsh stores are considered good sites for natural and organic products, and the retailer expects to reset them by early summer 2007.
Marsh also has been working with packaged goods manufacturers towards its goal of making its conventional Center Stores more valuable to shoppers and to make better use of selling space. An example is a rewards program it created with Kraft called "Healthy Living Club," which has been transplanted to its conventional stores. When consumers purchase a specific number of Kraft products, they earn rewards that they receive at checkout. The club has more than 100,000 members.
Part of that work with manufacturers includes SKU and total-store category optimizations. The optimizations free up space, creating more room for strategically placed mass display and pallet drop locations. Marsh can then use that space to display competitive prices on commodity products whose sales have been going to mass merchants and other alternative channels.
"Our customers come in and find a great value on laundry or pet or seasonal," Loneman said. "And those values will be in line with what customers might find at our mass competitors."