NORFOLK, Neb. -- Retailers should stress their points of differentiation when faced with competitive supercenter openings, a panel of retailers served by Affiliated Foods Midwest here said at AFM's fall food show.
Since last April, Wal-Mart Stores has opened supercenters that compete with stores operated by each of the panelists.
Clarence Kaslon, owner of Grand Central Foods, York, Neb., said he found it hard to believe "Wal-Mart would come to a town as small as 8,000, but there's no stopping them."
Steve Dolezal, owner of Joe & Al's Grocery, Columbus, Neb., said he started preparing for a Wal-Mart supercenter opening two years in advance by developing an advertising program "that stressed the things we do best that Wal-Mart can't do -- including home delivery, carryout service and the ability for customers to park close to the entrance -- because we knew we couldn't beat them on price.
"We really pushed the fact we were the only store in Columbus that carried [USDA] Choice beef exclusively to stress the fact there was no way Wal-Mart can touch us on the quality of meat, and we developed the slogan, 'You just can't beat our meat.' We took a chance with that slogan, but there was no negative response, and we've had only three weeks this year that we haven't beaten our numbers for the year before, and only one week since Wal-Mart opened."
Jim Cockson, co-owner of Didier's Grocery, Schuyler, Neb., said he took a similar approach, updating his store in advance of Wal-Mart's opening "as much as was feasible by replacing old cases, adding new departments and just painting and cleaning up the store way before Wal-Mart opened. And we started educating our employees and stressed the services we offer that Wal-Mart doesn't and never will."
Jeff Didier, co-owner of the store, said sales fell off for six weeks after Wal-Mart opened, "then we started to come back, and we're enjoying a small gain right now."
Bob Jones, manager of County Fair Foods, Marshall, Minn., said the key to his store's ability to compete with Wal-Mart "has been advertising what we do better -- stressing our positives, not their negatives. We also talked with our employees and showed them the differences in quality and sizes that we offer so they could share that information with customers, and that has helped us."
He said volume "took a hit, but only half of what we thought it would be, and we're now down to single digits, and we've been up the last two weeks."
Jeff Gamber, owner of County Fair Foods, Watertown, S.D., said his volume fell off "a little bit" when a supercenter opened near his store last May. But by emphasizing his store's strengths, including a 200% freshness guarantee, its USDA Choice beef program, larger fruits and vegetables, and carryout service, "it's now down to single digits, which is less than I expected."
He said he also educated his staff about Wal-Mart's hiring practices, "and we didn't lose a single person."
Jeff Dankenbring, owner of Dank's Big Market, Marysville, Kan., said he took a different approach than some of his peers, opting not to make much of an investment in his store. "Our strategy was to keep our cash in our pockets to have a war chest," he explained.
Dankenbring advised retailers faced with a Wal-Mart opening to "look at your store and ask yourself why people shop with you and then build on that. You can't be all things to all people, so you've got to know where you fit into the community and try to make your strengths even stronger."
To improve on one of his strengths, he said he sought to upgrade his meat program by hiring "the best meat manager within 50 miles."
Dankenbring said his store experienced a 15% sales decline when Wal-Mart opened a 99,000-square-foot supercenter last April in Marysville, but he was able to hold onto most of his customers "because I sought to educate the public in a factual way about what Wal-Mart does to a community."
His volume didn't begin to recover, however, until an independent competitor announced it planned to close a few weeks ago. "We were doing $30,000 a week before the supercenter opened, and now that the competitor has closed, we're doing $50,000."