You’d think supermarkets would be gloating about all their money, now that consumers are spending more meal occasions at home. But just because they’re dining at home doesn’t mean they’re buying the ingredients from a traditional supermarket.
A recent Marketing Daily story reminds us that traditional grocers are now competing with super-centers like Target and Wal-Mart, limited selection stores like Aldi and Trader Joe’s, and a host of “dollar stores.” Citing a recent Willard Bishop study, the Marketing Daily story said an estimated 42.1% of the typical food dollar goes to traditional grocery stores… and that number is expected to fall to just 35.2% by 2013.
Implications: In our Elm Street Economics workshops, we encourage participants to think beyond the companies they compete with in their own category; that one should also consider entire categories you could compete with. For example, the display of gazebos and outdoor furniture at a Target store featured signage that positioned the purchase as “an affordable alternative to that expensive family vacation.” Target has, in effect, decided to compete with the travel industry… by suggesting they can help consumers turn their own back yard into a pretty nice destination.
But just as looking outside your category can create competitive opportunities, it can also be the source of competitive threat. Kroger, Publix and Safeway are not just competing with similar supermarkets. They’re competing with club stores, convenience stores, dollars stores, discount stores and super-centers. Oh… and they’re also competing with restaurants… and the option that consumers have of skipping entire meals or choosing a grab-and-go snack replacement.
Likewise… beyond the competitors in your category, what categories might you compete with to create additional sales opportunities? Or, from which categories or channels might your next competitive threat be coming from?
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