Aldi + Giant-Landover - The Lempert Report

June 15, 2009

The Lempert Report Food News: Marketing, analysis, issues & trends and the impact on food and retail environments, specifically for the B2B food world with reporting and commentary on consumer and retailing trends by Phil Lempert. Phil can predict the future —and then help businesses and consumers understand it. For more than 25 years, Lempert, an expert analyst on consumer behavior, marketing trends, new products and the changing retail landscape, has identified and explained impending trends to consumers and some of the most prestigious companies worldwide. Known as The Supermarket Guru®, http://www.supermarketguru.com, Lempert is a distinguished author and speaker who alerts customers and business leaders to impending corporate and consumer trends, and empowers them to make educated purchasing and marketing decisions. To see more of The Lempert Report visit: http://www.thelempertreport.com The Lempert Report for Thursday June 18, 2009 Two supermarkets that do it right Supermarkets are supposed to shine when it comes to staples, especially during a fiscally wrenching period like this where household purchases are largely essentials. Food stores are supposed to represent the one retail class that consumers could count on to deliver basics without fuss, consistently and ethically, in any economy. The retail graveyards are proof, however, that many marquee names have tripped up on the fundamentals, or were eventually shunned due to their own arrogance. Why else wouldnt food stores assort and price to suit their markets, or execute consistently in the aisles, or keep known brands on the shelves that people trust—whether national or regional? Two operators, Giant-Landover and Aldi, seem to have the formula right for todays environment, the approaches differ, but both work for their customers. Giant-Landover grew sales by 3.6% in its latest quarter by delivering elements beyond price that shoppers want: comfort (wide aisles, bright lights), savings and speed (thru hand-held scanners), and access to healthful foods. The chains third-straight quarter of sales growth represents efforts by the mid-Atlantic operator to help restore market share under attack by Wegmans, Harris Teeter, Whole Foods and others. The Baltimore Sun newspaper cited Food World magazine figures that Giant lost nearly two points of market share in the 12 months ended March 2008. Aldi offers limited assortments just 1,400 fast-turn items and features its own brands almost exclusively, plus high-quality fresh produce. The chain claims it can save shoppers up to 50% on their purchases and meet 90% of a households grocery needs. Its compact stores, at 8,000 square feet, devote about 40% of space to fresh perishables and frozen foods. Aldi consistently presents low prices to shoppers, and uncomplicated business terms to the suppliers upon which it relies. The chains principles: no rebates, discounts, coupons, slotting fees or unwarranted deductions. This anticipated rise is nearly double the growth from the previous year. In 2008, gardeners spent a total of $2.5 billion on plants and kindred gardening supplies to grow their own food. The estimated productive annual yield of a well-maintained food garden is $500, net of costs. Not bad when you know that the average person in 2007, according to the Bureau of Labor Statistics spent just $211 for the year on fresh fruits and vegetables. But then there is the assortment issue, to be discussed in a future episode.And then there are those backyard chickens... Feathers are flying in municipalities across the country where laws restrict backyard chickens or other animals that people might want to raise for food. In some cases, they begin as pets and end as dinner, much to the horror of children. Other people raise chickens outright as meat sources and signal that by calling their outdoor residence the dinner coop. Still others keep chickens as pets, harvest the daily egg from each hen, and marvel at the foods richness, over and over again. These arent Old MacDonald wannabes looking to raise backyard animals for a lark. Their ranks include inner-city residents who work on urban farms and other modern-day homesteaders who want to save money on groceries, control a sustainable food supply, and be greener too. These people are the reason the magazine Backyard Poultry has a bimonthly print run of 100,000, and its publisher Dave Belanger told the Washington Post: Chickens are Americas cool new pet. For more analysis and insights log on to the B2B page of SupermarketGuru.com. The Lempert Report uploads right here every Thursday. To reach me directly, please email me at Phil@SupermarketGuru.com For information on New Products, visit our weekly videocast: http://www.ratefoods.com
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