Will an ‘Easy, Fresh and Affordable’ strategy improve Food Lion’s results?
Last August, the then still relatively new CEO of Food Lion, Beth Newlands Campbell, spoke about the need for her company to set itself apart and not be a "middle of the road" retailer. Now comes word that Food Lion is making the changes hinted at by Ms. Newlands Campbell and those include a new logo, extensive store remodels, expanded food and beverage variety, lower prices, a greater focus on fresh foods and re-training 63,000 employees to be more customer-centric.
The tagline to communicate the 1,100+ store grocery chain’s new approach is "Easy, Fresh and Affordable…You Can Count on Food Lion Every Day."
"For our customers to trust us, they need to be able to go into any Food Lion store and have a consistently great experience," said Ms. Newlands Campbell in a statement. "This is why our efforts to improve customer service and ensure our products are always fresh are so important. We want our customers to know that they can count on their local Food Lion team to meet their needs and serve their local community."
One example that Food Lion provided for a small, but important, change is its bags. The company’s new bags now come in two colors: blue and white. The blue bags are for cold and frozen items, making them more easily identifiable for customers when they unpack at home.
On the company’s new logo, Ms. Newlands Campbell said it provided "an opportunity to show our customers that we’re fresh, while remaining true to our legacy of low prices. Beginning later this year, we’ll also bring our customers items in our stores that are consistent with the logo on the front, as we deliver new Food Lion store brand products that will help our customers save."
Discussion Questions
What do you see as the most important elements of Food Lion’s new strategy? From which of its competitors (Harris Teeter, Walmart, etc,) does Food Lion have the best opportunity to gain share?
I’m not sure any of these tactics will bring in new customers, although it may improve perceptions from current customers. A new logo and better stores aren’t going to bring in people who never shop there or who have stopped going, at least for a long time.
I predict Food Lion will continue to lose share because the types of changes they are trying to make will either be lateral or ineffective. I really doubt the competition will lose any sleep because Food Lion will have colored bags, a new logo and a fresh coat of paint. Whatever Food Lion does end up doing right, the competition will respond with an equal or better response, if they haven’t already. Food Lion has been talking about this for years and so far the result has been closing stores by the bushel, leaving behind a trail of skeletal remains of vacant stores.
The key outcome from Food Lion’s strategy is the creation of a new store experience: easier shopping, removing some non-food lines to reinforce fresh food image. I like the well thought through strategy from the little things (bag colors) to big ones (new store format, expanded assortment, re-training) and using their revamped logo to emphasize fresh image without losing touch with their heritage. Taken together these moves speak to the company’s commitment to the communities they serve (and current customers).
I don’t think this new strategy will necessarily take market share so much as protect their current customer base, but it will make it more uncomfortable for Harris Teeter.
I am not sure that Food Lion’s new strategy will set it apart and gain any share from competitors. Food Lion is a notch above most Walmarts, but significantly behind other competitors in their trading area.
The two areas that I see as needing most improvement are being addressed. The freshness aspect and customer service will only bring them closer to most of their mainstream competition. Both are difficult to achieve unless you have new teams on the meat and produce sides and are willing to invest in the additional labor and extensive training that will significantly improve the customer experience. Can it be done? Yes, but it will require new thinking in both areas.
Let me start with the least important — the new logo!
I realize that every year branders make millions because companies believe that customers are stupid enough to believe that a change in typeface is equivalent to a change in strategy and/or execution, but I’m not buying it.
Also the cute bags aren’t going to help. If you don’t know enough to get the ice cream in the freezer before you put the canned goods in the pantry, the color code isn’t going to help you.
Finally, “fresh” and “affordable” (assuming high quality) seem to be slightly contradictory brand promises. Most shoppers are conditioned to believe “fresh” costs more than “canned” so the idea of cheap fresh may signal decreased quality.
Food Lion needs to do something more substantial than let its executives sit around a conference table picking out new corporate wallpaper.
True competitive differentiation is more “show” than “tell.”
There really aren’t any important elements to Food Lion’s “new” strategy.
You can say it, but what does it mean? Easy? What’s that mean? Fresh? Does that say you weren’t before but you are now? Affordable? What does that mean?
“For our customers to trust us, they need to be able to go into any Food Lion store and have a consistently great experience,” said Ms. Newlands Campbell in a statement. So what does a “great experience” mean?
There is nothing here that gives a compelling reason for the shopper to say “Hey, I’ll take a look because there is something unique here.” If you are going to be “Easy,” that has to be defined and noticeable to the customer. “Fresh” is totally subjective just as “Affordable” is a matter of perspective.
If you want to swing the doors, Food Lion will need a compelling reason and this just doesn’t give one. There is nothing unique here to what so many have said before and saying it doesn’t mean you’re doing it because you’ve been so vague about it, the customer doesn’t even take a second look.
Being customer-centric is most important. The article is written from Food Lion’s point of view and is not customer-centric. If the strategy was developed this way, there is a problem.
I’m not familiar with Food Lion, but very responsive to the way they are reported to talk the talk, and walk the walk — and retraining staff to be more customer-centric is not shabby. More power to them. I hope they succeed.