Some of the industry's most intriguing initiatives require food retailing executives to think in new ways about how they go to business. On the following pages are five ideas for supermarket operators to consider in the year ahead that might at first seem to fly in the face of some traditional business practices.
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Reduce assortment: Although many supermarkets seek to carry more varieties of everything than any shopper could possibly want, perhaps stores could operate more efficiently with fewer stockkeeping units. That is the philosophy of Ahold USA at its Stop & Shop and Giant of Landover chains, where the company's Value Improvement Program has eliminated some 7,000 items from its offering in the last year.
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Cut the clutter: At Mollie Stone's, an effort to take clutter out of the shopping space has made one store easier to shop, prompting the company to duplicate the initiative at another location. Mollie Stone's cleared up clutter between the checkstands, for example, by eliminating mismatched display cases and replacing them with permanent shelving that took up less floor space, said David Bennett, co-owner of the eight-store chain.
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Test the restaurant business: Supermarkets have a tremendous opportunity to increase their sales through improved prepared food offerings, observers said, and one way to learn how to do that is by learning how to provide restaurant-quality food. To that end, retailers like Safeway and Publix have entered the food-service arena with investments in “fast-casual” restaurant concepts.
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Think like a brand: Food retailers can better connect with consumers by more narrowly defining what they stand for and building a brand image around those core attributes, as both Wal-Mart and Whole Foods have done.
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Prepare for a brain drain: As Baby Boomers retire, supermarkets need to think ahead in the recruiting, training and development areas to prepare future leaders for the challenges they will face in the coming years.
