Ahold Stocks Up On Staples
By George Anderson
Ahold’s Stop & Shop and Giant-Landover supermarkets are getting ready to go back-to-school.
The supermarket chain announced a deal to put office supply areas under the Staples brand in its 550 stores by July. Departments will receive between 40 and 80 feet of dedicated
shelf space and feature between 500 and 1,200 school and office products.
The decision to rollout Staples’ departments to all of Stop & Shop and Giant stores comes after a 60 store test at Stop & Shop. Staples is doing a similar test with Kroger
in Las Vegas, Nev. and Salt Lake City, Utah.
In addition to the standard assortment of office and school supplies found in many supermarkets, the Staples’ section will also sell printer ink cartridges and technology products.
Marc Smith, president and CEO of Stop & Shop and Giant Landover said in a released statement, “This is a great way for us to bring added convenience to our customers. Staples
has created a model that is easy to execute and fits perfectly with what our customers need.”
Burt Flickinger III, managing director at Strategic Resource Group, sees more branded store-within-a-store deals happening in the future. He told US Today, “Stores with collaborations
do an average of $5 per transaction more, which is about an 18 percent to 20 percent higher spend per shopper.”
Ted Taft, partner at Meridian Consulting said, for supermarkets, “Just having your traditional core products isn’t enough anymore, because one of the strategies that Wal-Mart
used against supermarkets was breadth of products.”
Moderator’s Comment: What is your reaction to the Stop & Shop/Giant-Landover and Staples announcement? Is the traditional supermarket, for all intents
and purposes, dead? Can stores be successful just selling traditional grocery store products? –
George Anderson – Moderator
To your three questions, George…
1) My reaction to Staples products going into Stop & Shop/Grand Landover stores: Great move for Staples. It will eventually add thousands of new outlets for their products and further enhance the Staples Brand. Kroger and other “supers” will follow and Staples will soon become a staple in supermarket-type stores.
2) Is the traditional supermarket dead? Yes. The “traditional” supermarket went to its grave a quarter century ago when Sam Walton opened his first supercenter in Missouri.
3) Can stores be successful just selling traditional grocery store products? No, but niche and boutique stores can be successful in the foreseeable future selling innovative food and grocery-type products. But beyond that, the future is called “perhaps.”
Anything that takes a shopping trip out of the insane back-to-school season (which in Colorado is the first two weeks in AUGUST) is OK with me. I noticed last year that the office supply stores were displaying items that show up on many kids’ supply lists: Ziploc bags, boxes of tissues, hand sanitizer, Band-aids. That made sense and so does this.
I think that it is a brilliant move for Staples and not too bad for the supermarkets either. The supermarket, rather the most successful supermarkets, are evolving into more one-stop shopping and that is a good thing. Gas pumps, drive-through pharmacies, fresh flowers, in-store restaurants and now office supplies and services. This just makes so much sense that it makes you think, what has taken them so long?
First, the traditional grocery store has been evolving for a while. We have been conducting retail audits for 5 years and I can tell you – not many traditional stores carried aseptic soy milk or organic greens 5 years ago! Now most do. So the stores are changing. “Channel Blurring” is continuing and will not go away. We projected this last year in our Future of Packaging Study. It will continue. Supermarkets aren’t dead yet but they do need to get smarter and think outside the box. Don’t only rely on scanner data, competitive watches and what Wal-Mart is doing to get well. “Traditional” grocery needs to understand the bigger picture and they need to understand consumers. First, marketing is moving from media driven to consumer driven and innovation across the value chain is starting to make an impact. And secondly, retailers really don’t understand consumer trends, consumer insights or consumer need states. They understand what sells. If retailers could put the two together, they would be more powerful and the few that do this will differentiate themselves get healthier and improve top and bottom line performance. It will take more than a flyer and a deal to fix the problem. Just ask any CPG out there.