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No win, no how.

'If Inflation Is Licked, Why Do String Beans Cost So Much Money?"

This particular headline accompanied a story in The New York Times, but others like it appear all too regularly in newspapers all over the country. They reflect a widespread attitude of skepticism that continues to confront the food industry, come what may.

The Times article, typically, quotes a consumer who says, "In my pocketbook, inflation has not leveled off, and I have not met one person who believes that it has."

A well-to-do senior systems analyst has his own yardstick. "I used to spend $100 every week or two in the grocery store and come home with six bags of groceries," he says. "Now it's down to four."

A sweet old lady tells the interviewer, "I rarely have fish. It's astronomical. I rarely have coffee anymore. It's astronomical."

No amount of argumentation or evidence is likely to change these opinions. Commenting on the situation, a professor observes, "We still carry the scars of the inflationary decade of the '70s. That is deeply ingrained in people. They just go on feeling like they're under pressure by inflation whether statistics support that or not."

Clearly, grocers are in a no-win position on this issue. Regardless of what the government figures say, or retail ads proclaim, the public simply won't concede that food is relatively inexpensive, let alone a bargain, in today's economy. Somehow, though, our industry can't seem to accept that fact.

Against the prevailing backdrop of disbelief, grocers stubbornly persist in using price as a primary competitive weapon. They keep on killing each other (and often themselves) with deep discounts, ruinous specials, double couponing and other types of financial inducements--while consumers steadfastly maintain that supermarket prices are "astronomical."

The conventional wisdom is that price-based appeals have become mandatory for a supermarket to survive under present conditions. Even if that's true, and we think it's at least arguable, the effect has been to place the industry into another no-win position.

Every retailer wants a loyal core of customers, but consumer loyalty to stores has declined steadily as price skirmishing has intensified. This suggests that the tactitcs in use are contributing factors. To the extent that they actually promote disloyalty, they have to be labeled no-win because the better they work, the more they "achieve" an undesired result. Moreover, certain amenities may have to be reduced or eliminated in order to make price cuts possible--thereby debasing the shopping experience. So it's really impossible to "win" a competition predicated on price without losing something in terms of profit or attractiveness.

From a total industry standpoint, the burning question is: Are today's strategies a necessary response to today's conditions--or do they merely make a bad situation worse? Possibly our actions are magnifying the problem of satisfying consumers, even as we think we are dealing with it.

It should also be asked: What are the consequences if present lowball policies "succeed"? In the long run, will they bring about an increasingly healthy, capable, and people-pleasing retail grocery industry?

As we see it, most grocers have adopted a basically defensive posture. With few exceptions, they are looking over their shoulders, reacting to competitors' moves, and playing not to lose. Until this changes, and the mood becomes more confident and positive, there can't be much hope that the industry will be able to pull itself out of the current no-win position.
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Title Annotation:grocery trade
Author:Walzer, Edgar B.
Publication:Progressive Grocer
Article Type:editorial
Date:Nov 1, 1984
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