GHQ Cover Story 02/05: Anomalies of Scale

Feb 04, 2005
George Anderson

By George Anderson

Through special arrangement with Grocery Headquarters magazine, we present these opportunities to discuss the subjects of GHQ’s monthly cover stories.

The moral of the Grocery Headquarters’ cover story for February is that size doesn’t
matter when it comes to being successful in the grocery business. Try doing without some innovative thinking and a clear plan to fill a market need, however, and you’ll find failure
is pretty much guaranteed.

Independent grocers, according to the experts who spoke to GHQ, often find their lack of size is actually an advantage competing against large chains because decisions to experiment can be made and implemented more quickly than at larger competitors.

The key to independents’ success then is understanding target customer groups and delivering products and services that meet their needs better and differently than the cookie cutter competition.

Tim Metcalfe, owner of Sentry Foods-Hilldale in Madison, Wis., wants his customers to feel the love. “If you want to compete with a chain and Wal-Mart, you have to be better at emotional marketing and create the love factor within your store. Make your customers love you and do it with service, variety, selection, acknowledging your employees and, in turn, making your employees love your consumers,” he said. “It’s a lot like dating. I’m dating my customers. That is how an independent is going to compete.”

Bill Chanatry who runs Chanatry’s French Road Market in Utica, N.Y. agrees that employees are key to how consumers view a store. “I am a firm believer that if you don’t treat your employees right, they’re not going to treat the customers right,” he said. “You have to have happy employees no matter what business you are in.”

For all the Tim Metcalfes and Bill Chanatrys of the world, there are plenty of other independents who haven’t gotten the message, said Insight Out of Chaos president Spencer Hapoienu. “The marketplace is demanding an extremely high level of quality combined with service — not only in grocery, but across the board,” he said. “This has been talked about for over 10 years already, but most of the marketplace just does not deliver. Yet it is really the easiest thing to deliver. It’s just a matter of having that mindset and attitude and training your staff properly.”

Moderator’s Comment: What do you see as the biggest challenges facing independent grocers? Who are some of your favorite independent operators? Why?

Tim Metcalfe’s biggest worry appears to be that the supermarket chains are finally learning the same lesson he and other independents learned years ago.
“Some of the chains are starting to get out of this corporate everybody’s-got-to-have-soup-at-the-end-of-aisle-4 mentality,” he said. “They’re breaking the mold a little bit because
they have to compete. Independents have been doing that for years, and that has kind of been our point of difference. If there’s a threat to the independent, that’s it. Wal-Mart
has always been a threat, and we felt we could always compete against the chains. But if the chains start to compete against us in our realm, then that’s a real danger.”

George Anderson – Moderator

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1 Comment on "GHQ Cover Story 02/05: Anomalies of Scale"

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Art Williams
Art Williams
16 years 1 month ago
There will always be room for and success waiting for any retailer that can understand what their customers really want and give it to them. Grocers have a great advantage in that people have to eat and buy groceries, but they just have so many choices of where they can do that. As has been pointed out so many times, the challenge is to differentiate your business in a positive way. It seems like many chains are making that easier for the independents as they are reducing service levels and going to self-checkouts among other things. I love technology, but the only reason I use self-checkouts is to save time or avoid a slow checkout clerk. I would much prefer a friendly and efficient checker who likes her job. The chains that are pushing self-checkout on us by reducing staff and increasing their self-checkout lanes will save overhead in two ways. One of those ways is having fewer customers to have to checkout. I don’t see the opportunities for independents as having noticeably changed nor… Read more »