James Tenser

FDBuyer: Clubbing The Clubs

July 13, 2010

FROM RETAILWIRE:
For supermarkets getting clubbed by club stores and losing share, experts advise grocers to focus on selection, convenience and quality. And -- perhaps most important -- be sure to stand for something. How should supermarkets position themselves to face competition from club stores?      [more...]

Forget about club packs, which are a knee-jerk reaction. Supermarket shoppers want the unit price economy without the forward-buy commitment. I believe the best competitive opportunities lie in fresh foods, where club stores have trouble matching their operating style to household consumption patterns.

A huge tub of baby salad greens from Costco may seem like an astonishing deal until three-fourths of it wilts in the household fridge on day three. Ditto for that clamshell of berries or the two-gallon pack of milk. The six-pound multi-pack of bacon is a good-deal, but a perilous invitation to over-consumption--as are those trays of mega-calorie muffins.

When a supermarket makes itself an indispensable destination for items that households need to replenish several times a week, they win the opportunity to entice shoppers to purchase other staple items. That's where broader assortment and refined in-store communications can pay off handsomely.

No doubt, the clubs offer some grocery items that are superior in quality and unit price. Supermarkets must accept the reality that many of their shoppers will hit the clubs too. But the battle is about share of wallet, not "owning" the un-ownable customer.