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Upsetting the Market Basket.

Byline: Meg Major

As we take the wraps off our 65th Consumer Expenditures Study (CES) while winding down our year-long, decade-by-decade retrospective series in homage to PG's 90th anniversary, I'm struck by an ironic twist that surreptitiously fuses the key elements of these two feature stories - one of which is Walmart, the other our "Deconstructing the Market Basket" signature research report - into a top-of-mind topic that's caused ripple effects across the industry in recent months.

In our two-part 1990s installment beginning on page 16, we recount the halcyon days of Walmart's swift, stealth-like assault on the U.S. grocery industry, which triggered sweeping transformational changes to standard operating procedures that were firmly entrenched at the vast majority of supermarket companies. Meanwhile, subsequent changes for the world's largest retailer lead directly into the prevailing theme of our extensive CES market basket analysis.

Specifically, the converging stories find me pondering Walmart's ongoing documentary-style "Market Basket Challenge" TV commercials, currently airing in 25 metro markets, which compare its grocery and drug prices with the local market share leader in each. Bill Simon, president and CEO of Walmart U.S., characterized the campaign as "terrific" at the recent Goldman Sachs Global Retailing Conference, citing a 1.1 percent uptick in store traffic and a 1.2 percent sales lift versus control group markets.

In addition to its credible first-person messengers, the commercials' production MO fits precisely with Walmart's established EDLC cred, which borrows heavily from the methods, technologies and aesthetics of TV's most successful reality shows. Filmed on a Tuesday and aired by Thursday, the spots are especially successful, according to Simon, because they're "specific, they have a very short shelf-life, and we're able to refresh them frequently" at a cost roughly 25 percent of that of a typical Walmart commercial. "It's very, very effective, very efficient ... and allows us to deliver a far more intense, far more direct message" to shoppers, whom he affirmed are responding favorably.

While Simon is clearly pumped and unabashed in his conviction that he and his Bentonville brethren "are so excited and bullish about the growth opportunities that are still in front of us in the U.S.," it's crucial to keep in mind what led the once-almighty Rollback Man to roll out one of the most in-your-face media campaigns of all time in the first place, namely, a sideways-leaning stock price, a two-year spate of anemic quarterly comps and a flawed small-format store expansion, to name a few pertinent reasons.

As I see it, Walmart's battle to put the genie back in the bottle is also largely attributable to the competitive skills of PG's core food retailer audience, which has admirably risen to the occasion to combat the $4 billion-pound gorilla, whose cage has been clearly rattled.

Walmart's battle to put the genie back in the bottle is also largely attributable to the competitive skills of our core food retailer audience, which has admirably risen to the occasion to combat the $4 billion-pound gorilla, whose cage has been clearly rattled.

I further believe that "Walmart fatigue" had also quietly taken hold in the minds of many shoppers, who'd begun to have their fill of cavernous, impersonal stores that offer little reason to linger beyond perfunctory purchases. I'll also admit to believing that Walmart's widely publicized Great Value store-brand revamp woefully missed the mark with its stark, generic-style packaging that provides a vivid visual cue of the harsh economic times that - real or perceived - prohibit many folks from purchasing lifelong cherished brands.

As the mega-retailer continues to infiltrate the airways - and infuriate its retail food competitors in the process - with its audacious market basket media blitz, the onus is squarely upon traditional grocers to deliver on the promise of a better experience and better food.

That's why investments in such areas as associate training; pristine produce; visible, easily accessible meat merchandisers; and attentive front end staff are more important today than ever.

Meg Major

Editorial Director

mmajor@stagnitomedia.com
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Author:Major, Meg
Publication:Progressive Grocer
Geographic Code:1USA
Date:Sep 1, 2012
Words:766
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