Currently, Kroger is the country’s largest traditional supermarket chain. Kroger sells over $60 billion a year, and operates over 2500 supermarkets across the country. But even Kroger is still in competition with Wal-Mart. Wal-Mart’s philosophy and culture does not appear to value consumer or company ethics. They compete with more than food prices. Many supercenters offer a full-service drive-thru pharmacy, an optical center, a 1-hour photo processing center, a portrait studio, a bank, video rental store, hair and nail salon, fast food chain, tire shop, and even offer 24 hour a day-365 days a year availability.
The temperature controls for all of Wal-Mart’s stores across the country are controlled by one computer in Bentonville, Arkansas. Because of Wal-Mart’s size, they have the power to instruct suppliers on how to package their products, including meats. However, meats is one area of the supermarket industry that Wal-Mart has some weaknesses because many supermarkets provide a friendly neighborhood butcher who provides a friendly face and customized approach to consumers’ meat needs.
To Wal-Mart, hiring a butcher is a labor expense that is not needed. These types of attitudes in the supermarket industry are exactly the reason why consumers may choose to seek their family grocery needs in a culture and environment where more emphasis is placed on quality customer service, up-to-date technological advances, marketing strategies that cater to a more culturally-diverse consumer, quality products, and a smaller environment that provides a neighborhood-marketplace atmosphere.
Smaller supermarkets can offer a wider variety of products, particularly fresh fruits and vegetables, meat, poultry and fish. Many successful smaller supermarket chains sell a limited number of grocery items to ensure that the quality is maintained and products are not sitting on a shelf for an extended period of time, and change the product mix frequently to offer unique products at a good value, changing the shopping experience for every visit, especially for repeat and loyal customers.
A study conducted in 1999 found that the implementation of customer loyalty programs/frequent shopper programs increased by 16 percent from the first quarter of 1998. As loyalty programs increase, and marketing technology becomes more integrated and advanced, the responsible analysis and collection of customer data will provide merchandisers with numerous opportunities to market products, programs and services that supermarkets can offer to its consumers, including those in an ethnically-diverse population.
Supermarkets must be responsible and ethical in their collection of data about their consumers and cater to their shopping needs by offering both quality customer service from its employees, and quality products that fulfill their shopping needs. Extensive study must be done on the consumer to uncover where shoppers shop for certain needs like staple items, meats, fresh fruits and vegetables, and organic foods, and offer these products in the most cost-effective manner so that the smaller supermarkets do not lose their market share to the larger supercenters and chains.