® A DIGEST OF IDEAS TO STEAL MARKET SHARE WWW.STEALINGSHARE.COM VOLUME 97 NUMBER 6 SPRING Grocery is all about change So what are grocers to do? there. finding their positions in . Kro- The bad news for the grocery industry is beat grocers at the price game ger has used a theme of “Fresh Food, that it has become a cauldron of consoli- because low prices were never part of their Low Prices.” How is that different than dation. The past few years have seen major brands. They were only marketing messages Walmart? grocery chains buying smaller competitors while Walmert means low prices. When consumers are faced with all to forestall the Walmart takeover of the in- In our corner of the world in North Caro- things being equal, they will choose the dustry. lina, a once-thriving was doomed market leader. (Therefore, ’s theme Kroger’s buys and Roun- the instant the nearby Walmart added a gro- only works if there’s not a Walmart nearby.) dy’s. Albertson’s buys and Hag- cery. It closed months later and has sat emp- Couple the Walmart copycatting with gen. ACME Markets, a subsidiary of Alb- ty ever since. other unemotional messages, and pref- ertson’s, buys a bankrupt A&P. On and on. Then there are the shifting eating trends. erence ends up depending on location. The consolidations hints at several Consumers want healthier options, which Hence, the number of mergers and acqui- trends for the grocery industry, even if the have led most groceries to increase their or- sitions. largest players (such as Kroger and Albert- ganic offerings. Messaging son’s) are seeing this as way to fight the re- Whole Foods is the organic food leader, The messages have become throw- tail behemoths of Walmart, Target, but it will never be the market leader be- aways and others. Even more, those messages are just By increasing distribution, those chains used as just that. Messages. They are not are hoping to out-large those big boxes so firmly affixed to the brand the way Walmart they can overtake market leadership. has affixed its theme to the brand. For the smaller and regional groceries, When that happens, even if the mes- the consolidation spells doom. Soon, they “Copying sage is differentiating (and most are not), will either be put out of business or forced they are not believed because they just to accept an offer from the large chains. Walmart’s sound like marketing. For all those groceries, this is not a good Albertson’s has used “You’re in for trend. Walmart isn’t going anywhere. It is something fresh,” which sounds like it was already the market leader and some re- ownership of written by an ad agency and does nothing ports say more than half of its earnings to distinguish the chain from the compe- come from grocery. low prices is tition. It has even been able to win with its pri- To compete with Walmart, those chains vate label brand, Great Value, leading the and others must be truly different and bet- way. If anything, Walmart will increase its simply a loser’s ter. Copying Walmart’s ownership of low emphasis on grocery. prices is simply a loser’s game. Trying to game.” build your brand (or advertising campaign) Trends affecting the industry on fresh food just defines you as a grocery Before we answer that question, let’s store. take a step back. There are two trends Instead, grocery chains must define who cause organic foods are expensive. It re- flowing through the industry that are- di their customers are when they use your mains only part of the equation. ametrically opposed to each other, if you brand. So how do you approach the changing think about it. On one hand, groceries That’s how preference is created. If your food environment (with its higher prices) have often captured market share through brand is a true reflection of the target au- with a large segment of shoppers buying sales, low prices and couponing. The dience, then consumers will be incapable based on price? weekly newspaper circular still exists today of choosing anyone else because it would even though newspapers themselves are be going against their own emotional na- not as relevant as they once were. (That’s Scouting yourself tures. Grocery shoppers have preferences but why apps are becoming the couponing Apple users Think Different. Nike users a majority of them will buy groceries from system of choice today.) Just Do It. What do your customers do? more than one place. You can buy the basics The problem is that, now that Walmart at Walmart (where price supersedes quality), has entered the fray, that tactic is not as ef- a prime choice of meat at Fresh Market and fective. Walmart’s brand, encapsulated in have the occasional trip to Harris Teeter or its theme of “Save Money. Live Better,” is Kroger on the way home. ® so embedded in the minds of consumers BEYOND THEORY What grocers have struggled with is that consumers who shop on price shop

A PUBLICATION OF STEALING SHARE, INC., THE GLOBAL LEADER IN DEVELOPING BRAND STRATEGY TO STEAL MARKET SHARE “If they are choosing solely on price. We find out WHY they value it so highly..”

“It might surprise you to know that the strongest motivator in B2B rebranding is always an emotional IDEA.”

® BEYOND THEORY

A PUBLICATION OF STEALING SHARE, INC., THE GLOBAL LEADER IN DEVELOPING BRAND STRATEGY TO STEAL MARKET SHARE