Enduring perishables
A key to survival for supermarkets may be in perishables, where they have the most experience and expertise. And Armbuster says Shop ‘n Save has a lot of room to run when it comes to perishables.
"We believe there is no topside in produce, meat and deli," says Armbuster. "We believe that we will win by being one of the best purveyors of perishables."
That contention is demonstrated in the company-owned store in Wilkins, one of the chain’s newest and an important testing ground for new merchandising concepts and strategies. The key to maximizing meat sales, Armbuster says, has been to offer the customer greater variety within the category. Shoppers who might be prone to pass up some beef products, for instance, might be persuaded to buy the same cut if it is sliced thinly, offering smaller portions to the diet- or cost-conscious consumer.
Produce departments account for about 10 percent to 12 percent of total sales in the typical supermarket, but their profit margins are high — 40 percent or more — and consumer research shows that customers rate produce quality high on the list of reasons for shopping at a particular store.
At the Wilkins store, the produce department offers items like prepackaged salad greens, exotic fresh and dried fruits, and an assortment of fresh herbs. It also features an expanded array of organic products, a category that researchers say will grow in importance in the future as the baby boom generation ages and seeks out healthier food choices.
While the Wilkins store is only a few years old, the delicatessen, in-store bakery and prepared foods departments already have been revamped and expanded; the deli now has about three times the linear footage of the previous department.
To stay competitive, Armbuster says, Shop ‘n Save is using the data it collects from its corporate and franchise stores, all of it residing on a single database, to make decisions about merchandising its stores. The data can indicate where strengths or weaknesses lie, and suggest to the experienced merchandiser what action might be taken for improvements.
A store that is weak in a key category may require a repositioning of the merchandise in a more prominent location or demand more shelf space. The stores, particularly the corporate-owned locations, become laboratories where the company tests its merchandising concepts. Those that show promise are then rolled out to the other stores.
"If you went and visited the various corporate stores, you would see things that are different in each store, and you would see that in the independent ranks as well," Armbuster says. "We’re constantly testing and then pulling together the successful tests, and then creating a better and better model."
Armbuster believes the data can help fine-tune individual stores’ merchandising, taking advantage of varying buying habits and patterns in particular locations.
"We also believe that there’s a tremendous upside to micromarketing each store site to the demographics around the store," says Armbuster. "In some markets, Italian foods sell better than in other markets, and all that’s in the data."
A lot of the best ideas come from the independent owners, a group that Armbuster says is particularly sensitive to the demands of their customers.
"Having a group of stores that have individual owners really creates a whole level of commitment that you don’t find in a group of stores that simply have store managers," says Armbuster.
Armbuster says learning to read the data and using it to make the right decisions are critical to meeting the demands of customers who have more choices and whose demands and tastes are changing. And reaching the right conclusions means experimenting with various techniques to find what gets the desired response from the consumer.
Says Armbuster: "The best way to leverage that data is to be sure that your assortments and your product presentation satisfy the needs of those customers on a Tuesday afternoon. It has become that kind of environment."
But meeting the customers’ expectations is only part of the formula that it takes to win in his business, he says.
Says Armbuster: "Success is not just fulfilling customers’ desires today, but anticipating what they’ll be tomorrow."
HOW TO REACH: Shop ‘n Save, www.shopnsavefoods.com; Food Marketing Institute, www.fmi.org; Retail Forward, www.retailforward.com
