Supermarkets Inc Tells Part of the Story

January 31, 2011

Consumers get a taste of the supermarket industry's inner workings from CNBC special, which sheds some light on shopper psychology, shelf space competition and more; but one hour just isn't enough.

Many of the right sources and examples were on the air to enlighten viewers on the speed, enormity and state-of-the-art efficiencies and appeals of today’s U.S. supermarket industry. 

For example, there was the opera performance and theatrical merchandising at a Giant Eagle Market District store. The Scan-It! hand-held devices at Stop & Shop. An interview with Whole Foods Market co-CEO Walter Robb in which he defined competition as “anyone selling food,” and defended its prices, noting “for the same quality standards, we’re competitive” and inviting people to “compare basics and conclude.”

This bouillabaisse of a CNBC-TV program, Supermarkets Inc: Inside A $500 Billion Money Machine, contained many ingredients of a show with substance—it just wasn’t filling for people in the industry. Rather, it should be considered an entry point for consumers with little professional insight about how their food arrives so bountifully and easily.

The show seemed to aim for sensationalism on some points. Host Tyler Mathisen pushed Robb repeatedly on the ‘Whole Paycheck’ question. Mathisen also told viewers “anything you do in a supermarket is fair game” and “you’re being watched, tracked and analyzed in ways you couldn’t imagine.” While he went on to cite in-store heat maps, video monitors and loyalty cards, he didn’t explain a great deal about them. Rather than reasons for paranoia in our view at The Lempert Report, these are tools that help the trade efficiently deliver what shoppers want—and that’s clearly vital in this high-tonnage, low-margin industry.

Supermarkets Inc. did impress with a lot of location shots, but its generalist approach lacked depth and currency about hot issues today such as food safety and new shopper behaviors that emerged since the recession began. Also among the missing: Wall Street pressures on the decision making of publicly-owned chains. Walmart’s miscalculations when it went too far in ‘rationalizing’ brand space not long ago. Reasons why retailers push their own private labels. How sales events work, and the differentiating aspects of trade promotions to build trips. Industry battles with credit card companies. And more.

Reporting on issues like these would better frame the story for consumers to understand the complexities of today’s supermarket industry.