FDBuyer: Bi-Lo is 50!
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Dairy Buyer magazine.
One competitor of Bi-Lo complains that he is not at all happy with the Greenville, S.C.- based chain’s aggressive “fuelperks!” program, which offers discounts for gasoline based on store purchases.
“I suppose if you wipe your debt away (Bi-Lo emerged from Chapter 11 protection a year ago), you can afford to do things like that,” he said. “They’ve got a good loyalty card program, and they’re advertising on the radio constantly. It’s definitely helped their business.”
So, now that the chain has reached the ripe old age of 50, how’s it doing?
“It’s holding its own,” is what I heard most often from vendors, competitors and market observers.
Given all that Bi-Lo has been through in recent years, that’s pretty darn good. Annual sales from the chain’s 207 stores in South Carolina, North Carolina, Tennessee and Georgia reportedly run in the range of $2.2 to $2.3 billion. Some estimates run higher than that. For its part, Bi-Lo isn’t saying much.
At a vendor conference in February, Bi-Lo said same-store sales rose 3.7 percent last year. reversing a seven-year decline. It credited pricing and promotion initiatives, including the fuelperks! program which, by the way, customers appear to love. Bi-Lo also announced plans to spend $50 million in store renovations this year, including three newly renovated stores in Greenville and 23 other store renovations either on the drawing boards or already underway.
Brian Carney, Bi-Lo’s CFO, was quoted as saying at the time that when he joined Bi-Lo in 2005, he was told that the chain had to “get out of the middle” between low-price and high-service. But he said that Bi-Lo is now trying to “embrace the middle,” offering low prices while also offering high quality and customer service. Some observers see this as risky over the long haul.
Indeed, according to last August’s Consumer Intentions and Actions Survey (CIA, put out by BIGresearch), price, location and selection came out as the top three reasons Bi-Lo shoppers say they shop there. But the chain still fared poorly against Walmart, Publix or Aldi in various key attributes.
Bi-Lo scored a tad below the national average for supermarkets (but above Walmart) in terms of its Net Promoter Score, a measure of store loyalty that was also part of the BIGresearch study.
Bi-Lo had a lower percentage of both Detractors and Promoters than the national average of those surveyed. But it had a higher than average percentage of Passives — shoppers who didn’t feel really passionate about the stores. To me, this suggests that Bi-Lo hasn’t staked out a strong position in the market, as Walmart and Aldi have for price and Publix has for service.
All in all, the chain is clearly “holding its own,” as observers say. These are strong and intelligent initiatives, but my own take is that Bi-Lo needs to stand for something that easily and readily resonates with shoppers — price or quality/service.
Discussion Question: Is an “embrace the middle” strategy for Bi-Lo or other regional grocers practical?