Great execution creates market share king - The Packer

Great execution creates market share king

04/04/2014 09:06:00 AM
Armand Lobato

Armand Lobato, The Produce AisleArmand Lobato, The Produce AisleWhat makes a grocer successful?

With all the hype in trade journals on the subject, and considering the marketing that goes into the average chain’s budget all the way down to tip-toeing into the competition to try to find what they’re doing well, what makes a chain do better than another isn’t really all that elusive.

Beyond top-down support from corporate? In a word, it’s execution.

Take for example, the chain I grew up in.

The Kroger-based Denver chain consistently posted over 50% market share during the 1970s to the late 1980s. Fifty percent. Considering that most chains get along well with 10% to 15% in a crowded field, this lion’s share was the envy of the nation, despite one national competitor outnumbering our chain by a margin of 2 to 1.

Hey, it isn’t bragging if it’s the truth.

At least one of the key components that set our chain apart was a focus on execution at all levels, such as sanitation, customer service, quality products, great selection and minimal out-of-stocks, just to name a few. We were the “good” store, the popular grocer, the one with the fewest complaints (and when there were complaints, we dealt with each one personally).

So how did our produce operation fit into this scheme?

We followed the chain’s directives. Think about your own shopping experience expectations. Does your store appear inviting and fresh in all its offerings? Are you able to quickly find what you came in for, and if not do clerks assist you? Are you able to get all that you needed (and perhaps a bit more) and get checked out by fast, friendly cashiers, and did you get on your way with minimal obstacles?

Typically, these are key shopping desires. It is interesting that price is seldom listed as the key obstacle to switching chains. Our chain was competitive but not considered the lowest priced.

In produce, we did our part by allowing managers free reign (within a few guidelines) to merchandise as they saw fit, according to their neighborhoods. The produce manager could elect to expand or reduce facings, push hot items or mixed commodities for best color breaks and especially merchandise for maximum sales and gross profit. All of that is rarely seen in today’s strict produce destination-marketing schematics.

Today, this chain that I grew up in still has the dominant share, however slim. That is a real testament considering the constantly changing market. Nevertheless, their share is down considerably these days, as competition is fierce. My old stomping grounds seem to be in the same, focused execution-mode today. It’s nice to see they haven’t thrown in the towel.

One thing is certain for this or any grocer — things aren’t getting any easier.

Armand Lobato works for the Idaho Potato Commission. His 30 years of experience in the produce business span a range of foodservice and retail positions.

armandlobato@comcast.net

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