SUPERMARKETS STRUGGLE TO CATER TO LOCALS

David Merrefield

Food retailing has always been a local activity, and in-market operators can do much in terms of participating in community affairs to be seen as active participants in shoppers' lives.

That's still the case, and this week's news feature, referenced on Page 1, outlines many of the ways that chains are endeavoring to do that.

But, in that regard, let's focus our attention on the large chains. After all, big-scale operators face the greatest challenges in keeping close to communities since their executive suites may be thousands of miles from some of their store locations, or may even be in another country. So what to do? Large chains can simply forget about local marketing altogether and offer another proposition that customers may find irresistible, such as establishing price points significantly lower than those a smaller operator could match. This approach, although slightly exaggerated, is that of Wal-Mart Stores, and without exaggeration, that of Aldi.

Operators may also walk away from local marketing by focusing on product. For instance, a chain may offer unusual selection -- either a lot of product or a very fine-tuned offer -- or it could expand product lines beyond what's usually found in a supermarket.

The strategy of abandoning local marketing, though, offers an opening gambit to many in-market operators, so it really can't be used except by chains with an ability to establish an unmistakable alternative proposition.

Alternatively, large operators can employ technology to take a stab at local marketing. The most obvious example of this is to use loyalty cards to learn what shoppers in any locale want to buy. This is a somewhat rudimentary means of local marketing, since it doesn't admit to real local involvement in community life. But that can be accomplished, even by a large company, by pushing decisions down to the local level, by permitting regional or store managers to make decisions about real community involvement. One of the big companies that has had success with all these approaches to local marketing is Ahold. Many large chains have enhanced their local reputations by helping with disaster relief, proceeding cautiously with local authorities concerning store sites and by operating stores where other operators won't go.

Take a look at this week's front-page news feature for more ideas about local marketing.

AWARD

Now, to shift to another topic altogether, I was gratified to join Danny Wegman, president, Wegmans Food Markets, Rochester, N.Y., and his wife, Stency, at a ceremony last week at the Union League Club, New York. The occasion was that Wegmans and SN were winners of the American Business Media's William D. Littleford award for Corporate Community Service.

Wegmans was nominated by SN for the award in connection with Wegmans' founding and sponsorship of a program now called the "Hillside Work-Scholarship program," featured in SN of April 23, 2001. The program involves the assignment of advocates and mentors to high-school students at risk of failing to complete school. Students in the program are also given part-time employment at Wegmans stores, and ultimately are eligible for college scholarships if they complete school.

The program has been instrumental in sharply reversing high-school dropout rates. See Page 49.