Strategies for Surviving in a Wal-Mart Era

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SAN FRANCISCO-Aggressive, focused marketing can help independent supermarkets fend off the attack of clubs, supercenters, warehouses and other alternative formats.

That was the conclusion of speakers at a recent meeting of the National-American Wholesale Grocers' Association.

Alternate formats have been studied since 1988 by Bill Lancaster, VP-sales for Associated Wholesale Grocers, Kansas City, Kan., and Springfield, Mo. When a Wal-Mart or another such rival entered a market, half the supermarkets lost business, but he found an equal number gained sales.

Independents can fight them by developing an image "as thoroughly as an architect designs a high-rise building," Mr. Lancaster said, adding that the larger formats appear not to be faring well in small towns.

One of the independents that has fought megachains most successfully is Harp's Food Stores. Sam Walton owned and ran a Ben Franklin across the street from Harp's first store, and later Harp's outlets were next door to Wal-Mart's first, second and third stores in Rogers, Harrison and Springdale, Ark.

But Harp's has fought back and is thriving. Today, it has 25 supermarkets, including six Price Cutters, in northern Arkansas and eastern Oklahoma.

Mr. Lancaster said the the secrets of its success include:

Staying on top of pricing, matching lower prices and pointing out where prices are higher, sometimes in newspaper ads.

Keeping fresh departments strong because grocery shopping, which includes purchases from the perishable departments, isn't very compatible with general merchandise shopping.

Establishing customer interview programs, requiring each department manager to interview 10 customers a day.

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