The battle for customers grocery dollars is an ongoing as consumers choose between supermarkets offering all organic like Whole Foods versus supermarkets offering cheaper and organic groceries like Kroger, Walmart, Publix, etc.?
The USA TODAY reported in an article titled Grocery stocks in slow checkout lane that niche groceries specializing in organic food like Whole Foods are taking a hit as larger grocers like Kroger and Publix are adding organic products to their shelves on a weekly basis.
For example, Publix is well known for its GreenWise organic products that offer their own line of organic products as well filling the shelves with organic products made by other food manufacturers. This is giving large grocery stores an edge because consumers can now find both healthy/organic products and less expensive non-organic products too.
It was reported in the article that grocery store Fairway Group filed for bankruptcy protection and Whole Foods did not meet Wall Street expectations as its adjusted profit will fall about seven percent this year.
“Now organic is everywhere you look,” says Chuck Cerankosky, analyst at Northcoast Research.
For years consumers have been demanding healthier foods and the food manufacturers have gotten the memo and have made more shelf space for organics products. Customers are happy with that and now that larger supermarkets can accommodate customers needs they can do all of their shopping at one supermarket, which saves consumers and their families both time and money.
The battle for supermarket superiority continues as more and more supermarkets continue to pop up all over the country. For example I have seen niche supermarkets like EarthFare and Lucky’s Market pop up in the Southeast in an area already flooded with Publix, Super Walmart and Kroger Supermarkets. Throw in other niche grocery stores like Trader Joe’s and The Fresh Market and you have a battle going on.
The question will be: Can any of these supermarkets differentiate themselves and build brand loyalty just enough so consumers don’t have to drive around town to buy groceries?
Publix and Kroger’s offer premier customer service, while EarthFare offers a wide variety of organic food and grocery products.
As the US population grows, so will the continued needs for consumers to eat and buy groceries. The stock prices may have dropped for companies like Whole Foods, whose share price has dropped to $30.42 as of this blog post, however people need to eat. As long as the need for food and other grocery items does not go away neither will supermarkets.
Competition is great for the supermarket industry and will help improve it over the next years. The competition may come from companies like Google and Amazon as both companies continue to disrupt by providing customers to shop online and have groceries delivered right to your door or company.
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