There once was a time when the grocery store was the industry disruptor. People used to go to a butcher, cheese store, bakery, and other independent retailers for all their grocery needs. Then grocery stores combined all of that under one roof, pushing out many specialty retailers. But as online and big box retail grows, smaller grocery stores are starting to feel like the smaller retailers being pushed out. How can an independent local retailer compete against a mammoth big box store with more distribution and bigger profit margins? Here are three unique ideas that may help.
- Offer more ethnic and gourmet items. Some things like toilet paper or cereal can be bought at almost any store. In those situations, customers don’t care about where they buy it. They care about how much they pay, and bigger retailers can offer deeper discounts than smaller retailers. Many of these items are housed in the center aisles of stores, and they can be a reliable profit source for retailers who know that someone is always going to buy basic supplies like cereal and toilet paper. So how do you bring customers in? By adding more ethnic and gourmet items to your shelves. These items are sought after by customers, and having them on your shelf will make your store a destination and inspire more store loyalty.
- Push in-house and local brands. Trade funding, which allows national brands to promote their products in a store through displays and coupons, is a significant source of revenue for many retailers. These brands pay for space in stores which is a reliable source of income for retailers. But that revenue can be diluted when customers can find those products in almost any store. So instead, allocate more space to in-house brands and local products. The more popular these products become with your customer base, the more repeat business you will have!
- Focus on fresh products. Smaller retailers can always come out ahead by offering a boutique fresh food experience with produce, bakery, meat, and seafood. Big box retailers are getting better at delivering these products, so you can make your store stand out with more diverse and high-quality products. You could offer butcher services, gourmet deli or produce orders, or specialty baking to compete with bigger retailers.
Grocery stores disrupted the retail world, and they can do it again. Our UNFI professional services team can help you get a strategy in place to compete with larger stores and offer specialty shopping experiences to your customers. Reach out to our team, and let’s get to work on a strategy for your store!
