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Delhaize Group opened a new concept store this morning in Gembloux, Belgium, that it says features an emphasis on low prices, a significantly edited grocery selection, and a high service component, and has incorporated some innovations originally developed in the US.

Among the features of the new 21,000 square foot store, according to the company:

• “Red Market offers a range of quality products that meet the customers’ everyday needs (+/- 5,400 products). The focus is on food, along with personal care and household products, as well as a number of ‘emergency items’, such as kitchen utensils and stationery products.

“In addition to the products that meet everyday needs, Red Market offers local products (e.g. beer, snails) and ‘discovery’ products (new or special products). By limiting the number of brands in each product category, Red Market simplifies the selection process for its customers, so that they can complete their shopping in less time.”

• “The general use of self-scanning, a new (single line) queuing system at the check-outs and extended opening hours are 3 additional features of the concept. The role of the (25) store staff primarily consists in offering customers a friendly and efficient service.”

• Except for bakery, there is no in-store food production, reducing the need for high-cost labor and centralizing production in an offsite location.

• Another innovation in the fresh food, according to the company, “is the way all fresh fish, meat and poultry products are packaged. The new type of packaging guarantees optimal quality and keeps the product fresh for longer after the customer brings it home. Another innovation is the refrigerated units with closed doors in which most of the fresh products are kept. These innovations guarantee the improved freshness and protection of the products and above all result in reduced energy consumption, which benefits the environment.”

The company says that “the launch of Red Market is perfectly in line with (its) strategy of continuous innovation and concept differentiation. To this end, the test project in Gembloux incorporates elements of various store concepts that Delhaize Group has recently developed and implemented across the world. Examples are the Bottom Dollar prototype that Food Lion recently opened in the US, the Hannaford concept store (US) that opened at the end of 2007, and the Lion Food discount stores launched by Alfa Beta in Greece in 2008.”

The Red Store is being operated by a new Delhaize division called Smart Food Shopping, which is set up to be independent of the main corporate structure.

KC's View:
There was an interesting story in the Wall Street Journal the other day that reported on how retailers in western Europe seem to have the ability “to cater to local preferences in a cost-effective way,” which “may help position these companies to weather the economic downturn better than their competitors. Western Europe's top-performing grocers grew at twice the industry's compound annual growth rate between 2000 and 2006. One practice that set them apart: The winners are more adept at localizing their offerings.”

The message seems clear. While standardization may be the best way to grow a company, the best way to serve customers, it becomes increasingly clear, is through varying kinds of customization.

Haven’t seen the store in person…I couldn’t figure out how to get myself to Gembloux this morning…but it sounds impressive. Delhaize continues to impress with its innovation and differentiation efforts, both here and in Europe. And spinning off entities that can thrive in a more creative atmosphere is a smart was of nurturing creativity.