When a Competitor Moves into Your Space and Eats Your Lunch (and your customers are eating theirs)

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.

Comments (15)

  1. Maria says:


    You may not consider yourself to be a marketing person, but clearly you’ve not only perhaps absorbed some skills via osmosis, but you are also a natural.

    I’ve never been to Larry’s but I know exactly the type of store you are describing.  I think your recommendations are spot on and they should implement all of them, but especially and starting with number 1.  If they did the research and listened to their consumers I am sure they would hear everything you listed under number 3.

    Great post.

  2. pccbooster says:

    you mean PCC, you heathen, not PFC 🙂

    the original organic food store.  There’s one in Issaquah and one in Kirkland.

  3. HeatherLeigh says:

    Maria-Thanks! I guess I absorbed a little of that marketing stuff ; )

    pccbooster- oopsie ; ) I’ve never even seen one.

  4. HeatherLeigh says:

    Uh-oh, now something called Zupan’s is coming: http://www.msnbc.msn.com/id/11537385/

  5. anon says:

    Keep talking business, analysis, and opinions.  This is interesting.

  6. Paul says:

    Sounds like you are really passionate about food and have a keen interest in the social/demographic trends you see happening around you.  It also sounds like that is the ‘x’ factor missing at Larry’s.

    It’s hard to do a heart/brain transplant with people that don’t get it.  Have you thought of creating your own brand and opening Heatham’s Food Boutique?  (I know you dislike that old email concatenation, but it seems appropriate here, no?)  If I lived in Seattle, I might even shop there – it feels like a nice place.

  7. MSDNArchive says:

    Wow. I SO don’t care about grocery shopping to this level. I’d rather swoop in, buy some breakfast cerealm swoop out, and get back to coding. 😀

  8. HeatherLeigh says:

    Paul- funny, I have ALWAYS thought about doing my own thing like that. I was in the entrepreneur program in college so I always felt that I could. Here’s my business (I wouldn’t be giving it away since I have seen it done elsewhere before): do lunch catering and come into buildings that don’t have a cageteria with an assortment of sandwiches, salads, etc. Many jobs ago, someone did that in our office building in CA and i loved it. Could use that to jump start a food business. I guess I secretly wish that someone else did that business. And yes, I love food. Mostly, fresh, whole foods that are healthy (no chips or cookies in my house).

    johnkenn-as a Microsoft shareholder, I’m glad to hear that ; )

  9. Brian Toland says:

    Great well thought out post. Hopefully someone at Larry’s will care enough to listen.  You better watch it, you’re in danger of becoming a marketer.  🙂  

  10. HeatherLeigh says:

    I guess I’m a marketer but not a "marketer", if you know what I mean. We are all marketers.

  11. Tim says:

    You have been thinking about this a lot, Heather. And I am worried about you.

    The real questions remains, however, when Larry’s Market goes under and you see a Marketing resume with Larry’s as their last position are you going to say, "Um, PASS!"

  12. HeatherLeigh says:

    Tim, seriously? Wait, is this the Tim that blogs about Spam (the meat stuff) regularly? I’m really not the kind of person that anyone needs to be *worried* about. But yeah, I analyze things that I notice. Some people might even call that blogging ; )

    I do care if someone did marketing at a company with poor marketing, especially if they were in a position where they were in charge of making marketing decisions. I would look at other things on their resume too and if those other things looked good listen to why they joined and left that company but knowing the industry is part of recruiting. But just to be clear, we  really target folks coming out of the tech industry, even for our marketing roles. That’s not to say that retail marketing folks can’t get hired here but it’s not a big target for us in my space. So when we are hiring people from out of industry, they have really done some impressive/amazing work previously.

  13. Wow, you were omniscient….Larrys files for bankruptcy.

  14. HeatherLeigh says:

    Karl-I bet a lot of people saw it coming. In the meantime, a PCC is being opened right up the street (in addition to the new Whole Foods). I can’t wait!

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