More Food Sales in Drug Stores?

By John Karolefski

Will more food be sold in drug stores and other small-box formats?

By stimulating impulse purchases and offering assortments for fill-in grocery shopping, operators of these stores could increase food sales. That was the consensus of a panel of CPG manufacturers and drug store retailers at the 2011 Marketplace trade show hosted by the National Association of Chain Drug Stores (NACDS) recently in Boston.

“Food and beverage have a lot of growth potential in small box stores. When you think of buying cheese for lasagna, a drug store and dollar store are not the first places that come to mind. So we’ve got some work to do,” said Diane Tielbur, Senior Director, Shopper Insights, Kraft Foods

“We see food as a big opportunity for us,” said Bill Renz, Vice President, Consumables, Rite Aid Corporation. “We want our consumers to think about our products as being fresh.”

Other panelists included Scott Cole, Vice President, Strategic Sales, The Hershey Company; Karlis Nollendorfs, Senior Consumer Insights Director, Health and Wellness Division, General Mills; and Jose Alvarez, Vice President, Merchandising, Navarro Discount Pharmacies.

In the short term, Tiebur of Kraft said retailers can build food sales by intercepting the consumer along the shopping path and creating an impulse purchase.

“It’s really understanding how consumers shop today and connecting with them on the journey,” she said. “Wouldn’t it be great if these formats could be associated with ‘instant consumables’ where you buy something that you’re going to eat in the next 30 minutes?  These formats are best. They are located on the best corners, and are easy to get in and easy to get out. 

“In the long term, there’s an opportunity to drive trips,” she continued. “With the right assortment, small box formats could be a quick trip for grocery fill in. The top draw for quick trip and fill in are dairy, fresh meat and fresh produce. Not that you have to provide all of those offerings. From a meat standpoint, one pound of ground meat or a pack of chicken breasts are enough for a family to go in there as an option for that quick trip.”

The opportunity in small format stores hinges on driving trips, building baskets and creating value, according to Cole of Hershey. Most importantly, it continues to build on that loyalty to the retailer’s brand by the store’s most valuable shoppers.

“It’s not easy to buy a parcel of land {in urban areas} to build a big box,” he said. “So bringing dairy, fresh and frozen to small formats in those areas gives people alternatives to QSR restaurants. It’s about unlocking those trip missions. So if it’s convenience for a snack, or it’s ‘what’s for dinner?’ or it’s that quick fill in, there are a lot of new ways to talk with shoppers and bring them into these formats.”

Nollendorfs said General Mills is looking into one of those ways by perhaps developing a “grab and go” snack business in small box stores. “We think there’s a great opportunity to bring items like single-serve yogurt to small box stores. That’s not something that’s currently available in your typical drug store, but there’s an opportunity there,” he said.

To offer Rite Aid shoppers value and more food choices, Renz said the chain last fall opened 10 co-branded stores with Supervalu’s Save-A-Lot in South Carolina.

“We take a test-and-learn approach when we do these new business strategies. For Save-a-Lot in the value channel, we are gratified by the early results. So far, so good,” said Renz who added that the chain sent its grocery category manager to the Marketplace show to meet with food exhibitors. 

Navarro Discount Pharmacies is taking a practical and focused approach to food in its stores, according to Alvarez. Chef Pepin, a TV personality and cookbook author, is the company’s celebrity spokesman. He conducts in-store demos to educate parents and children about good eating habits, what foods to eat and what foods to avoid.

“We’ll work with our suppliers to help us offer products that will provide healthful meals to our shoppers. We’ll cook right in the store using products right off the shelf. We also try to teach them about portion control,” said Alvarez, whose Miami-based company of 29 stores is the largest Hispanic-owned pharmacy chain in the U.S.


'His' and 'Her' Grocery Aisles
 
By Tom Ryan, Managing Editor, RetailWire

With men doing more of the food shopping, male-only supermarket shopping aisles that focus on gender-specific products rather than merchandise by category could encourage men to browse longer, trial new items and spend more, according to research coming out of Australia.

Dr. Gary Mortimer, from Queensland University of Technology's School of Advertising, Marketing and Public Relations, focused on the healthy & beauty zone.

"Past research has shown that there is a group of male shoppers who have a 'fear of the feminine' or fear shopping among women's health products such as tampons, waxing strips, pink razors and body scrubs,"
Dr. Mortimer told Queensland University of Technology's News Web Service. "More recent research found that men made more purchases and had a positive association with health products that were not placed in high traffic areas or next to feminine-inspired products. This is based on the idea that men are apprehensive of women's products and are therefore less likely to spend time perusing their own personal needs."

Men also shop differently, valuing efficiency and independence over customer service and tend not ask for help.

"A gender specific aisle would provide a relief to men, inspiring them to explore and discover new products. It also creates a sense of privacy, even sanctum," said Dr. Mortimer.

Dr. Mortimer also implied that more men's-segmenting could support other categories as the gender has become increasing discerning in their shopping habits and even more impulse-driven.

"Retail liquor, for example, is typically a grid-style layout, so retailers could easily create an area specifically targeted at that market," he told Start Up Smart.

Speaking to The Herald Sun, Benedict Brook, a spokesman at Woolworths, Australia's largest supermarket chain, expressed doubt that a "man cave" is necessary, noting the 65 percent of men's toiletries are bought by women.

A few of the 32 comments that followed a Courier Mail article on the research were favorable of the idea if it led to a simpler shopper experience for men. Wrote Bill of Brisbane, "It's not about sexual insecurity. It's about making the sale."

But several -- including many men -- sarcastically lampooned the idea or were even angered, given feminine hygiene needs. Wrote Fed up Female of Brisbane, "Get over it fellas, now you know what women deal with everyday of their lives."

Discussion Questions: Should supermarkets have men-only lanes? Does a 'fear of the feminine' exist at all for men shopping in certain categories? What categories at supermarkets would particularly benefit from better men's vs. women's segmentation?

RetailWire Instant Poll Results:
















RetailWire BrainTrust Comments:

I am sure that there are men who would prefer to shop in a man aisle, but would think that would more likely be a generational thing. The "older" generation, of which I am a member, grew up in a time when being seen around such things as "women's" products were to be avoided. Two daughters later and my mindset got changed.

I can also understand how the young (old enough to need the products, but...) might feel a little nervous about buying personal hygiene items in the same aisle where the girls from school are buying theirs. However, for the most part, I don't see the need for a separate aisle.
Steve Montgomery, President, b2b Solutions, LLC

I'm a big fan of male-only aisles, but not because of a "fear of feminine" (I mean, really). The reason I like
them is because there is a tangible difference between how women and men shop. At the risk of gross over-simplification, women tend to be browsers. They like to look at things they didn't specifically come in for and will walk down all the aisles. Men, on the other hand, tend to be "target" shoppers. A good experience for them is to get in, find what they're looking for quickly, and get out quickly. Anything that can facilitate this will be a big hit for men.
Bill Emerson, President, Emerson Advisors

Shouldn't this be more correctly termed "mates only"?

I supposed there are cultures where this might be a reasonable idea -- and three years on the wonderful Isle of Oz was experience enough to convince me that Australia might be one of them. But after over ten years of consulting with Fem Hy clients, I just can't see it being an advantage here in the U.S.
Ben Ball, Senior Vice President, Dechert-Hampe

Preposterous, IMHO. Never had a problem with this, or even given it a thought. By designating a lane that is supposedly "men-only," you might also be making it more difficult for women to go there, with the overall effect being to reduce total sales. How would I feel if there was a "women-only" aisle? I might be less likely to go there, but basically I'd just find it weird. I thought we were moving toward being more inclusionary, rather than in the other direction.
Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer

I agree with Steve -- this MAY be a generational thing.

First of all, I've never seen a man "browsing" the feminine hygiene aisle. They either blow past it or make a quick, very directed purchase. Not a lot of male impulse shopping there.

Next...although this still seems a surprise to some...it is the 21st Century and deliberate gender discrimination (at least blatant, public discrimination) is out of fashion everywhere except of course advertising, media and ... well, apparently ... retail.

Following this logic train, don't you need a Senior's Aisle for incontinence products which might make younger shoppers uncomfortable?

How about a Children's Aisle for shoppers comfortable with products aimed at the 10 or below set?

And what about Pork-Free meat departments for observant Jews and Muslims and a Beef-Free meat case for Hindus? I'm sure all those folks would feel more comfortable not having taboo foods shoved in their faces.
Ryan Mathews, Founder, ceo, Black Monk Consulting

I think it has taken the industry overall a very long time to recognize that not only is the shopper mostly a "she," but that she shops differently from how many CPG companies were targeting her. To assume that we've come so far in targeting "her" that we now have to provide special areas for men in grocery stores feels a little strange. I haven't shopped an Australian grocery store, so maybe it's a different environment there. But mostly I would say that if you're doing a good job understanding both who buys and who uses your products, and you meet their needs, it's not going to really matter whether we're talking about men or women. I appreciate the finer points of male/female psychology and shopping habit differences. But really.
Nikki Baird, Managing Partner, RSR Research

YIKES !

No intention of being "politically incorrect." This blog post is directed at U.S. marketers, not their Middle East counterparts. No need for separate aisles.

Men and women, singles and families, young and old, multiple cultural patterns, married and divorced--they're all in the stores. The days of 2.2 kids, 3/4 of a dog, and a station wagon are over, and not likely to come back.

Does that mean that merchandising techniques have to continue to evolve? Of course they do. It's OK to see women as better, more efficient "gatherers." Likely men might need a bit more direction in supermarkets in order to hold them there for an added number of minutes per visit. And, the in-store displays should evolve, too.

Based on the December, 2010 Simultaneous Media Usage (SIMM) Survey, men are more greatly influenced by 1) ads on shopping carts, 2) floor graphics, 3) information kiosks, and 4) in-store television.

Women are more proficient at 1) reading product labels, 2) making use of specific displays, 3) using store loyalty cards, 4) tapping into in-dtore flyers, and 5) making use of register tape coupons, and 6) they respond more to product samples.

Separate aisles make for a bit of a punch-line in a stand-up routine. They have no practical application in a supermarket that has some 99 trips per year per household.

Now, if you're talking about a "Warehouse Club" experience, ladies, please keep an eye on your men--they are like a dog getting ready to hop in the car when you want to go there--but they get lost easily.
Roger Saunders, Managing Director, PROSPER BUSINESS DEVELOPMENT / BIGResearch

I'm with Ben and Ryan on this. Seems like a backward move in today's era and (general) shopping environment. I'd be most interested in hearing from folks like Church & Dwight, with a portfolio of what were traditionally feminine products, now targeted to men as well. Would Nair-For-Men do better if located in the "man cave" aisle???
Mark Baum, Partner, MARCAT Group LLC

This is kind of funny, but I thought trade supermarkets were already set up by gender. There are simply sections that men enjoy more than women and visa versa.

The biggest factor about this discussion to me is that men are target shoppers, pure and simple, and women
are more willing to roam (although that's changing a bit). So, if you give men another section to shop outside of their target, you'll be asking for trouble. Key to marketing men is always the "kiss" philosophy, and if that fails, use slapstick.
Lee Peterson, EVP Creative Services, WD Partners

Read the entire story and RetailWire discussion at:
http://www.retailwire.com/discussion/15296/his-and-her-grocery-aisles

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JUNE 2011

Food Lion's Not So Extreme Makeover
 
By George Anderson, Editor-in-Chief, RetailWire

Last summer, Food Lion began surveying its customers about what they would like to see in its stores. The grocery chain has responded and recently began testing a number of changes in stores in the Raleigh, NC and Chattanooga, TN markets. Food Lion has cut prices on 6,000 items, increased staffing levels for better service, upgraded its produce departments and reorganized shelves to make it easier to shop its stores. If the test proves a success, Food Lion plans to roll out the changes to all its 1,200 stores in the Southeast.

Cathy Green Burns, president of Food Lion, said the changes are intended to keep the chain competitive over the long haul.

"The model is not broken; it's still a very profitable operation," she told The News & Observer. "We just want to make sure it's going to be sustainable."

The retailer is also opening new stores, including a 35,000 square-foot unit in March located in Fayetteville, NC, that was the chain's second Leadership in Energy and Environmental Design (LEED) certified store in the state.

The store's produce section, according to The Fayetteville Observer, is set up to look like a farmers' market. Organic products are available throughout.

Greg Beaman, a merchandise specialist for Food Lion, said the store includes another green initiative that you don't see in other supermarkets. "To encourage bicycle travel, we got a little bicycle shop where we can fix your tire, and spaces out in the parking lot to encourage carpooling," he told the Observer.

Discussion Questions: What types of changes do you think consumers most want from supermarkets? What changes are most effective for those looking to create a sustainable competitive advantage?

RetailWire Instant Poll Results:


























RetailWire BrainTrust Comments:

I think shoppers have always wanted good prices, good service, short checkout lines, and a good selection. The problem is, what defines "good" is a very individual thing and there is no "shopper"--there is a diversity of "shoppers." Some will trade off service and/or selection for price; some want the least expensive products alone. I'd like to think shoppers are smart enough to get that price and service are complimentary--as one is improved, the other usually has to suffer.

In order to be sustainable, the question may be, "what's available in my trading areas?" Given a TA has many different types of shoppers, where's the hole? What's missing may be what's sustainable. Food Lion dominates markets like Fayettville NC with Piggly Wiggly as its competition. What is different from Piggly Wiggly and appealing to shoppers is what's likely to be sustainable.
Dr. Stephen Needel, Managing Partner, Advanced Simulations

I am impressed that Food Lion is taking these steps now, in light of the current economy. The points in the article I found inviting are the produce area built to look like a farmers' market and a bicycle repair shop. I read this morning that Publix is placing restrictions on coupon usage. That is a negative compared to Food Lion's upgrading and making shopping more inviting.
Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

A year ago, it was Food Lion's goal to become the low price leader. I guess that didn't work. What was their goal the year before that and the year before that?

Large conventional supermarket chains have a problem. They don't stand for anything. Therefore they cannot establish a sustainable competitive advantage.

Compare Food Lion's positioning over its history to Wegmans' positioning. In the last 40 years, Food Lion seems to have changes at least 20 times. During that same time Wegmans' positioning has not changed at all.

Of the list outlined in the discussion, there is nothing unique that the conventional supermarket across the street can't do in the blink of an eye.
Gene Detroyer, Entrepreneur, Advisor, Consultant, Professor, Independent

Interesting to see that the number of responses for price are nearly as much as all other answers combined in the poll so far. We talk about all the different ways to create a sustainable difference in this space quite often, but gut instinct response often comes down to the lowest price. It's got to be tough to convince people you're not in a commodity business when you treat your business like a commodity.
George Anderson, Editor-in-Chief, Associate Publisher, RetailWire LLC

Food Lion can maintain its market share with its lower prices and increased service, but it will definitely affect their bottom line. Gaining a huge increase in customer count is almost impossible with the economy, and lack of growth, and all of us must get more out of each customer that walks in the door.

When and if the economy gets better, Food Lion and the rest of us can slowly raise our prices back up, and our bottom lines will start to improve. I have committed to keeping all of my prices down for the remainder of the year, just to keep sales where they are now, but my profits will shrink as well. I want our customers to remember that we are thinking about their pocketbooks, and Food Lion is smart to do this also. Everyone in my industry needs to bite the bullet, and maintain their high standards of service, quality, and yes...price to move ahead.
Tony Orlando, Owner, Tony O's Supermarket & Catering

Read the entire story and RetailWire discussion at:
http://www.retailwire.com/discussion/15250/food-lion-s-not-so-extreme-makeover

RETAIL TRENDS

More Food Sales in Drug Stores?

'His' and 'Her' Grocery Aisles

Food Lion's Not So Extreme Makeover
July 2011
               
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