I was doing some spring cleaning when Russ T. Blade emerged from behind some folders. “Rusty,” as readers know, is the miniature imaginary produce manager who occasionally drops in to talk shop.
Me: You’re looking a bit lonely, Rusty. Everything OK?
Rusty: I am bummed, man. A competitor opened nearby, and sales have dropped.
Me: Let me guess. The store manager similarly cut back on everyone’s labor hours, right?
Rusty: Cut to the quick. All departments: grocery, meat, dairy, service, and, of course, produce.
Me: How much of a sales drop are we talking? 30%, 40% ... more?
Rusty: Maybe 15%, but you’d think it was more. It’s a classic mistake of throwing in the towel before you’ve had a chance to fight and retain business.
Me: What could have been done? Or, what can be done now?
Rusty: For starters, before a competitor lays a single brick, a grocer should beat ’em to the punch and invest in a formidable remodel. You know, bring the store up to 21st century standards. Then the grocer who’s trying to protect their turf has to make sure they have the right product mix that the competitor is known to promote and merchandise that produce along with the current mix. Likewise, we have to be aggressively priced.
Me: That’s a tough call. Grocers like to meet or beat last year’s sales and gross profits.
Rusty: Even if there isn’t money to do a full-bore store remodel, a store can be proactive and do some internal revamping — adding features such as fresh-cut fruit, specialty foods, on-site meal preparation, expanded space for perishables, etc. Sure, you’re going to see sales affected when the competitor opens, even a little more shrink. But if your chain has a sound price, quality and high service reputation, that business will rebound.
Me: But again, you think your operation threw in the towel already?
Rusty: It’s coming. Every week we have fewer checkstands open, even during busy periods when we really need them.
Me: I’ve seen that too. At that point the store manager panics and calls clerks up front for temporary cashier duty in response.
Rusty: And that’s where it spirals downhill. As produce clerks man the checkstand, department sanitation and stock levels quickly deteriorate. Overall, employee morale suffers and is reflected in indifferent customer service. Sales slip. All reasons for customers to change stores.
Me: There’s no easy remedy. But I see the gist: Revamp, stock and schedule to the highest service level.
Rusty: Hang on to the towel. Focus on why shoppers like your store in the first place. Fight back.
Armand Lobato works for the Idaho Potato Commission. His 40 years’ experience in the produce business span a range of foodservice and retail positions. E-mail him at firstname.lastname@example.org.