I might just have food on the mind (South Beach day 4 and still surviving), but I’ve been thinking lately about the grocery store wars going on here in the Seattle area (well, the east side at least) and the marketing behind them. Like most metropolitan areas, Seattle-ites take their food seriously. And like any urban area with lots of professionals (well paid but busy), convenience food is a big focus of the grocery shopping experience. Add to that the healthy lifestyle that attracts many people to Seattle and you have a prime market for the high-end prepared and specialty foods stores.
When I moved here, Larry’s Market had a stronghold (there’s also something called PFC in Seattle but I’ve never been). Seven years later and Larry’s is almost irrelevant. Other retailers have either moved in, rebranded or stolen a niche of Larry’s Market. There are a number of things that I think Larry’s has done wrong or missed completely.
First, I think that there is brand confusion. When I first shopped at Larry’s, there were a lot of things I liked about it; some gourmet brands, prepared foods, aesthetically it was pleasant. It seemed to try to do a lot of things well; and different than the average grocery store. But as new stores moved in and other stores evolved, Larry’s stayed the same and all those other stores are eating Larry’s lunch. The problem for Larry’s is that the other grocery stores created stronger brand names in some of the areas that Larry’s seemed to be targeting. Up pops Whole Foods which excels at organic foods, up pops Trader Joe’s that specializes in quality off-price foods. Even Safeway has renovated it’s stores in the area to provide for a more enjoyable grocery shopping experience. What Larry’s was doing well, other stores are doing as well or better. It just seems that Larry’s doesn’t know what it’s about anymore. Customers like me are driving out of their way to shop at Larry’s’ competitors.
So not that they are, but IF Larry’s asked me what they need to do to turn it around, here’s what I would recommend:
1) Do some market research to find out why people are switching to other stores. Don’t ask yourselves IF people are switching to other stores. The Bellevue Whole Food parking lot is always packed. Those people used to be your customers. Warning bells should be going off all over the place. For example, I can tell you that I will drive out of my way to go to Whole Foods for one thing: organic whole wheat tortillas. I’m not alone. I will only stop in at Larry’s if I am driving by and I don’t have time to go elsewhere. You should miss my money.
2) Use this market research data to come up with a vision, value proposition and brand statement. Think about tapping into market segments with less competitive brand loyalty or under served needs. Decide if you are about gourmet, imports, organic, convenience. You dabble in all but don’t excel in any. If your marketing team isn’t already doing this, get a new marketing team. Heck, hire Whole Foods’ marketing team or for some real brand punch, Starbuck’s marketing team.
3) Implement your vision ASAP. Here are some ideas:
-quit using gross bagged lettuce in your salad bar and prepared salads. People that are willing to pay your prices don’t want that weird lettuce. They already feel like they are paying for better lettuce. And we all know that lettuce isn’t that expensive.
-implement a system to remove expired merchandise from the shelf when it expires (I can’t tell you how many times I’ve purchased something at Larry’s, got it home and realized that it was already expired)
-offer international prepared food choices. How about Indian and other Asian food selections, including vegetarian? Notice anything about the local demographics? Hello!
-offer ready-to-cook meat items that people don’t have to wait in line at the meat counter for (QFC does a good job of this). It’s really not that convenient if you have to wait in line for it.
-hows about some more low carb foods? I can’t tell you how many people I know that are eating low carb these days. Doesn’t matter if it’s right or wrong; it’s a market.
-stock more food items that people can’t find elsewhere and/or develop a strong store label to offer commodity imports at a good price (like Trader Joe’s)
-market to Microsoft employees, for groceries, prepared foods, catering. Trust me, we can be a thrifty bunch at times and a little discount or even convenience can go a long way
-don’t make people go to 2 different cashiers for Peet’s coffee and groceries. If I am stopping in for coffee, you have an opportunity to sell me lunch. Don’t make it so hard when Starbucks makes it so easy.
-and related to that, get the food-on-the-go concept down. Sandwiches are in one place, salads in another (in big flat containers that are hard to carry if you are buying anything else). If you want people to pay $6 for a white bread sandwich, don’t squish it under plastic wrap. Make it look like it’s worth $6. Throw in a pickle, for Pete’s sake. Why aren’t there chips right there next to the sandwiches? Add forks, napkins, salt near the cashier so folks picking up lunch for the day can grab all they need on their way out
-serious wine buyers are label loyal. If you are going to offer an extensive wine selection and the store next door does too (World Market), you better have good prices. QFC is also doing well in this space right now too. How are you competing?
I’m not recommending that Larry’s necessary do all of these things. It appears to me that the “be all things to all people” approach already isn’t working for them. Normally, I guess I wouldn’t care that much except that I used to shop at Larry’s. Aside from having to go out of my way a bit (and fight for a parking spot) to have the shopping experience I want, it’s painful to watch when the things that I think they could do to fix the problems seem so incredibly obvious (and I’m not REALLY a marketing person). I know that Whole Foods is opening another store nearby in the near future. I think Larry’s needs to compete or close up shop.