Wal-Mart Envy and Other Supermarket Issues

Feb 04, 2003
George Anderson

By George Anderson

The announcement of the death of supermarkets may be premature, although that may be simply a matter of time if the grocery industry does not reinvent itself in a hurry.

The industry, according to Ryan Mathews writing in Grocery Headquarters, is largely preoccupied with conserving diminishing returns, rather than making the changes necessary to spur growth. “As individuals, companies and as an industry, we have become far too dangerously adept at the art of recasting the problems of the past into the inevitable face of the future.”

Mr. Mathews offers the following observations and advice.

  • Supermarkets need to get over a “terminal case of Wal-Mart envy.” Wal-Mart’s secret is no secret at all. It succeeds because it relentlessly focuses on the consumer, optimizes the supply chain, and executes in-store.

  • The industry needs leaders. “Somewhere in the transference of power from a generation of pioneers to a generation of professional managers we seem to have lost much of the passion that once characterized this business.”

  • Supermarkets need to improve their understanding of consumers. Stores need to recognize “not just that all consumers are different, but that individual consumers are (from a purchasing standpoint) different people at different times of the day.”

  • Stores need to be brought into the 21st century. “Today’s supermarket “carries far too many items, arranged in a manner guaranteed to satisfy the abstract generalized desires of all consumers and none of the specific needs of an actual individual shopper. It also costs too much to staff and operate, a design flaw that breeds a host of problems from chronic out-of-stocks and unsaleables to endless tirades over who should bear the cost of retail execution.”

  • The strategy of one-stop shopping, vaunted throughout the 1970s and 1980s, continues to miss the demands of shoppers in the 2000s for retail solutions that are convenient, efficient and affordable.

  • Retailers need to make better use of technological tools. “Technology for what it is, an integral element of supermarketing that touches every aspect of product supply and sale.”

Moderator’s Comment: Is the supermarket industry in
trouble? If yes, how much and what will it take to turn it around?

Wanted: Leaders with “bold visions and the passion to
translate those visions into reality.” [George
Anderson – Moderator

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