Food Lion’s Goal to Become Low Price Leader
Wal-Mart’s shadow usually looms large whenever grocers start
talking about establishing a stronger price position in the markets they serve.
Grocers, even when they don’t mention Wal-Mart by name, can’t get away from
the fact that many consumers compare what they pay at the local Supercenter to
the supermarkets where they shop.
It’s become popular over the past couple
of years for supermarkets to engage in store-wide cuts as a means to establish
their own price credentials. Cathy Green, the new president of Food Lion, came
into the position in February as her company was rolling out its own lower
She told The State, "The most important thing
I had my eye on was our price positioning, especially given the economic situation.
(Price) is now number one in the consumer’s mind."
Ms. Green said
her goal was to make Food Lion the "low price leader" in
the markets it serves.
"We are working hard to transform business processes
to invest in price. It’s about running our business more efficiently. It
has nothing to do with just cutting costs. A small example of that is in our
distribution centers right now. In an aisle where a selector is not selecting,
the lights are off," she
told the paper.
Discussion Questions: Is Food Lion in any better or worse position to cut
costs than any of its traditional grocery competitors? What will it take
for supermarkets to truly be price competitive with Wal-Mart, Target and
other big box stores?