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Attitude adjustment: what is critical about hard times is how you approach them.

For the past couple of years we have all been in a pretty deep funk about the economy. Bad news just keeps on coming and if there's light at the end of the tunnel it may turn out to be the headlamp of a speeding train. Such a dismal situation makes it easy to understand why few individuals or businesses are in the mood to take chances.


Many, possibly most, companies are putting a premium on caution, hunkering down and waiting for the good times to roll again. Such a siege mentality, which first appears to be a reasonable approach to self-preservation, tends to squeeze out the flexibility and creativity that are even more crucial in a down market.

So if your competitors are circling the wagons, maybe your best option is to charge full speed ahead.

There are a number of serious problems facing the nation and the supermarket industry; when and how they will be solved is not at all clear. Unemployment is expected to remain high for several years. That means a lot of shoppers will continue struggling to pay for food and their price sensitivity is likely to increase.

The Agriculture Department projects food prices will rise by 2% to 3% this year, more typical than the 0.5% to 1.5% increase seen in 2010. Manufacturers and retailers are coming under increasing pressure to raise prices, while strapped consumers are seeking out the lowest retails. Robust operators will be able to sacrifice margin to draw shoppers away from their less healthy competitors.

All of this is likely to make the normally intense competition in the supermarket business even more so. If there was ever a time to engage with your shoppers and convince them you can help make their lives easier, this is it.

Research has found consumers eating far more meals at home than they did a few years ago, planning them in advance and pretty much sticking to their shopping lists once they get to the supermarket. That diminishes the retailer's chances of cashing in on impulse purchases of items that are not basic and are not on sale.

So the time to grab consumers' attention is before they are in the store, through the weekly circular and other advertising. Group promoted items so the shopper sees a number of complete meals just waiting for her to pick them up. Emphasize not just teaser prices but an overall sense of giving the most bang for the buck. The increases in food prices are not uniform. Grain products, meat and dairy are becoming noticeably more expensive. But prices for some other commodities are holding steady or even dropping a bit. Both advertising and in-store signage should promote them as economical meal components.

And, with an eye to the future, add reminders about the benefits of families making dinner and eating it together. If they come to see the activity as a positive, relationship-building experience, they may be reluctant to give it up when the economy recovers.

Important as it is to have a strategy that creatively addresses the current economic situation, it will be just as important to recognize when conditions warrant changing it.

Tom Weir can be reached at
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Title Annotation:ON POINT
Author:Weir, Tom
Publication:Grocery Headquarters
Date:Jan 1, 2011
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