ALBERTSON'S CEO: MEALS SOLUTIONS PULL CUSTOMERS IN

ROSEANNE HARPER

NEW ORLEANS -- Meals solutions programs can act as the magnets that bring customers into the store.

That's what Gary Michael, chairman and chief executive officer of Albertson's, Boise, Idaho, told attendees at the International Dairy-Deli-Bakery Association's Dairy-Deli-Bake '99 seminar and expo here June 6 to 8.

Neighborhood marketing and variety, convenience and good product information are the keys to success, he said.

"No matter how big or small a chain is, the biggest challenge is the customer," he said. And making sure that today's time-poor customer can pick up a meal or the components of one quickly, can keep them coming back into the store, he added.

"Customer count is the macro issue; how to get people to shop the store more frequently," Michael said.

"I believe that the home-meal-replacement department and the pharmacy have to get their own customers. Those two departments can't live off the rest of the store," he said. Michael was quick to add, however, that those two departments can breed customer loyalty.

He also stressed that fresh meals should be a total-store concept. Indeed, he said, the meat department and the bakery are crucial to the category.

"They're the departments that are transforming the concept," he said, referring to cross merchandising and the rising popularity of ready-to-cook meats. He added, though, that customers must be provided with more information.

"You see people standing looking at the meat, but not buying it. It's not because it's bad; it's because they don't know what to do with it. They want recipes and to be told how to cook it."

Michael also advocated neighborhood marketing. In regard to prepared or ready-to-eat foods, he said, "We can roll out the core concepts -- the pizza, chicken, and deli cheeses and meats -- from coast to coast, but it's the local suppliers that will make the difference," he said.

He scoffed at some people's belief that the big chains -- Albertson's is the second largest in the United States after a year of acquisitions -- can't do neighborhood marketing.

"Some of us are doing it better than the independents," he said.

But it takes constant research and innovation, he added.

Then he explained how Albertson's, whose units sprawl across the country, had at one time decided to take advantage of the strategically positioned commissaries that supply airlines' customers with in-flight food.

It sounded like a good idea, because the commissaries had unused capacity, but it didn't happen, he said.

"We would have had to buy trucks at about $100,000 each to transport the food. Also, those commissaries were still producing airline food and I don't know how much airline food you can sell."

Finding local suppliers and working with them on a product mix that fits customers' tastes and differentiates the store is the way to go, the Albertson's executive told his audience.

He said that in the face of consolidations, it's particularly important to find ways to efficiently tailor a store's product mix to the neighborhood.