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Tim
Callahan
ACNielsen North America
This past year demonstrated that the retail landscape is continuing
along its evolutionary path. Looking to 2004 and beyond, here
are some of the top issues and insights around the retail
channels that we measure.
1. Grocery must maintain ‘trip
frequency’
The grocery channel
has been experiencing a reduction in consumer trips. To build
frequency back into the mix, the grocery channel must:
- Shore up the perimeter. Fresh produce, meat, seafood and
baked goods need to be destination categories for grocery
stores.
- Improve in-store sampling. Grocery could learn a thing
or two from Costco, which has made a science out of in-store
sampling. And what about programs to improve relationships
between employees and shoppers?
- Reduce the incentive for shoppers to go elsewhere. Offer
more non-food items like printer cartridges, boost service
offerings, and sell branded items such as Krispy Kreme donuts
via the store-within-a-store approach.
2.
Drug can build its base by defending Rx
The drug channel is well positioned to benefit from the aging
population, but it needs to:
- Vigorously defend its Rx business. A critical issue is
the nationwide shortage of pharmacists.
- Continue to grow food offerings, building on its reputation
as the convenience store for women.
- Provide more “on the go” food offerings,
such as Walgreens’ “Welcome Home Café”
test concept.
- Test other store-within-a-store concepts in the drug channel.
Other channels are snapping up some of these opportunities;
the drug channel should make sure it doesn’t miss
out.
3. Keep an eye on the dollar channel
It is hard to argue
with Wal-Mart’s success. However, the fastest growing
channel in recent years (and one that is doing well with some
of their key targets) is the upstart dollar stores. Learn
what makes these stores appealing to help your own stores’
success.
4.
C-stores need to defend and differentiate
The success of the c-store format is a blessing and curse
to this channel. Consumers love convenience, but other retailer
formats have begun to take on some elements of c-stores. C-store
retailers need to:
- Vigorously defend their gasoline business in the years
to come.
- Expand and improve their food service offerings. Home
meal replacement could be a greater success in this channel
because c-stores are well positioned, with smaller stores
that are more convenient to get in and out of quickly.
- Stay very attuned to tobacco legislation and consumption,
as these are of utmost importance to the c-store channel.
- Continue efforts to draw broader demographic segments—particularly
females.
5. Club stores need to concentrate
on same-store sales growth
While store growth within the club channel has helped fuel
sales growth, same store sales growth has slowed. Projections
for channel sales are not holding true in 2003. Channel banners
Costco, Sam’s, and BJ’s are all trying various
techniques to re-energize their stores in the channel. It
will be interesting to see which plans pan out.
I’d like to
close with a very sincere thank you to all of our clients.
2003 proved to be a challenging year for all concerned. We
were delighted to serve as your information partner, helping
you make better business decisions in these very difficult
economic times.
Hopefully, I will
see many of you at our upcoming Consumer 360 Conference, April
13?15, 2004, in Boca Raton, Florida.
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