Traditional supermarkets are currently losing business on both ends of their customer spectrum. On the “price” end of the business, Walmart, Target, Aldi, Sav-a-lot, and Club Stores continue to chip away at center-store categories. Conversely, fresh specialty chains like Whole Foods, Fresh Market, and Trader Joe’s are showing up with increasingly regularity as accepted additional options for traditional supermarket shoppers.
The resulting impact on many, (not all) traditional retailers are negative comp sales, lower margins, and poor overall financial performance. Some, such as Food Lion, have tried to overhaul their image and offerings with new private label lines, lower prices and sharper promotions. Others, like Raley’s in Northern California, have launch significant new loyalty programs. Still others are remodeling their stores and adding new fresh and organic lines of perishables to stave off further attrition.
Two, retailers, however, have continued to produce positive comp sales and have grown their revenues through a variety of programs and initiatives. The first is Kroger. Much has been written and said about their dedication to investment in data, fuel programs, and overall pricing prowess.
The other is Harris Teeter, based in Matthews, NC. Harris Teeter recently posted nearly 4% same store comps for the year, while increasing their shareholder dividend. They have consistently innovated by offering in-store grocery pick-up, expanded their perishable offerings and services, and have cemented their leadership in their communities through giving and sponsorships.
One could also argue they understand who they are and are not. They are competitively priced, but certainly not attempting to compete with Walmart and the other “price” players in their markets. What they have done is expanded their value proposition on-line with digital coupons, and extra value for their e-Vic (electronic frequent shopper program) shoppers.
In essence, Harris Teeter exemplifies a retailer who follows the basic, but often times difficult formula for success. They understand their value proposition to their shoppers and continually re-inforce it. They stay competitive in price with innovative promotions and embracing digital content. They also are not shy about making some aggressive investments in their stores and programs to keep shoppers engaged and loyal. All of this is executed with remarkable consistency.
Harris Teeter is a winner. But winners are often targets for other winners to challenge. To that end, Publix has recently announced a major move into the Charlotte, NC market, one where Harris Teeter has significant share. So Harris Teeter will be tested once again to make adjustments to defend their turf. But one thing they will likely not do to beat Publix is change the formula that has yielded so much success in such tough times.