business news in context, analysis with attitude

Several stories in the media point to the intense competition taking place in the food industry these days, and how various retailers are dealing with it.

  • The Detroit Free Press reports that in Michigan, consumers are finding that Wal-Mart Supercenters are undercutting retailers like Meijer; in one case, the paper cites a consumer who has reduced her monthly grocery bill by $140 by shopping at Wal-Mart. Some reports have Wal-Mart coming in at 20 percent lower than Meijer on advertised items.

    What this means is that Meijer is in “a pitched battle” for consumers’ hearts, minds and wallets, musing gimmicks like six-hour price cutting specials to get shoppers into the stores. Meijer has decided to put some of its growth plans on hold and focus instead on renovating aging stores. In addition, it is putting in new departments, expanding grocery and perishable SKUs, and emphasizing a service attitude in order to maintain customer appeal.

    Ironically, Meijer is a company that practically invented the supercenter concept…and now Wal-Mart is using the same format to beat up on the Michigan retailer.

  • The Richmond Times-Dispatch reports that Kroger is on the march in the Richmond market, having opened three stores during the past year. the company intends to expand two existing stores, open three new ones and seek out other new sites aggressively.

    Analysts say that despite “intense competition” in the market, with tough, ambitious players such as Ukrops, Wal-Mart and Food Lion battling it out, Kroger seems to be doing well.

    According to a Kroger spokesman, the company is not just defending turf in Richmond. “We’re here to grow,” he said.

KC's View:
We’ve said it before and we’ll say it again.

We like offense. Not defense. Which is what companies like Kroger and Meijer have to play if they are going to successfully battle the Bentonville behemoth.

Bit it isn’t just those companies. In those same markets, retailers like D&W Foods and Ukrops are faced with the same competitive challenges…and are going to work everyday, trying to capitalize on their strengths.