Sunday, October 26, 2008

Independent Grocer Memo: The Battle of the Brooklyn Independents Need Not Be a Battle; It's All About Finding and Exploiting the Niches

Neighborhood Food Retailing USA

America's neighborhood independent grocers are often faced with competition from the "big guys" when a big national or regional grocery chain opens a store in the city or neighborhood where the independent has been doing business for years.

It's less often the case that another independent food retailer moves in and challenges the more established independent grocer on its home turf in the neighborhood.

However the dynamism of food and grocery retailing in the U.S., where thousands of independent grocery stores exist and more new stores open every week, is such that this occurs far more frequently than is commonly reported or discussed.

In fact, what is usually the case is in any given neighborhood in America at any given point in time, one finds multiple independents going not only head-to-head with supermarkets owned and operated by national and regional chains but with fellow independent grocers as well.

Al Sale (pictured at top left in his store), the 54-year-old owner of Good Food Supermarket (pictured in the second half of the photograph at top, left) on Court Street near Fourth Place in Carroll Gardens, Brooklyn, New York USA, has been one of the more fortunate independent grocers in America. Mr. Sale, who with his brother, Michael, has run Good Food for 30 years, has been blessed during those three decades by not having a competitive grocery store nearby -- neither a chain unit or fellow independent -- according to a story in yesterday's New York Times.

But that all changed about two weeks ago when a new independent grocery store opened near the Sale brother's (interesting last name for a grocer by the way) Good Food supermarket in the Carroll Gardens neighborhood.

That new independent supermarket, Gourmet Fresh, has been opened in the neighborhood by a family who formerly ran a Key Food chain supermarket in the area.

Al and Michael Sale hadn't been too worried about the new store since the name, Gourmet Fresh, suggested to the brothers the store would be selling specialty, gourmet and premium foods rather than a full selection of basic food and grocery products like their Good Food Supermarket offers.

But then the trucks started arriving. Al Sale tells the New York Times when he saw products like Coca-Cola and other basic groceries being unloaded at the Gourmet Fresh Market he began to worry a bit.

It appears Gourmet Fresh is offering items that match its name. But the new neighborhood supermarket also is offering basic food and grocery items, thereby serving as a direct competitor to Good Food Supermarket.

The Sale brothers are worried. The new independent supermarket is bigger than their store. It's more upscale in design and is offering more products than Good Food Supermarket stocks.

However, if our observations over the years are correct, Al and Michael Sale will figure out, like nearly all independent grocers do, how to not only survive the new competition but also how to thrive against it. It's all about finding a niche and becoming the best at it. This is something -- adaptation -- America's independent grocers are very good at doing.

And in the case of the Sale's and their Good Food Supermarket, they may have not had competition close by in the neighborhood for 30 years. However, lasting 30 years still takes hard work and dedication.

We suggest the Sale brothers place close attention to what the new independent Gourmet Fresh supermarket is doing for a couple months. Then figure out what they do best at Good Food Supermarket -- be it service, quality, niche merchandising, pricing, ect. -- and then do it even better than they have done it for the last 30 years.

Also, the brothers shouldn't forget about all the customer loyalty they've built up over the last 30 years in the neighborhood. Maybe it's time to thank those loyal customers with a valued-shopper discount program? Or hold a customer appreciation day -- reminding all who attend that the store has been around for 30 years and plans to be around for another 30 or more years.

Additionally, since Gourmet Fresh has just moved into the neighborhood, it's likely they are paying much higher monthly rent than the Sale's, who've been in their location for 30 years. Gourmet Fresh also has start up costs involved in creating and stocking the new supermarket.

This means Good Food Supermarket is at an advantage in terms of overhead. That could mean offering a few weeks of super hot, discount price sales promotions for the Sale Brothers. Offer basic and specialty groceries at hot prices so the store's regular customers might check out the new Gourmet Fresh store but will still load their pantries with sale priced items offered by the Sale brothers. Make those regular customers a price offering they can't refuse. Have some fun with the promotion: Call it the "Sale's Sale of Sales," for example.

Good Food Supermarket can't do anything about the fact Gourmet Fresh is a larger and more upscale looking store. But the brothers can play up on the fact they are the longtime local guys; the neighborhood guys. That's a niche worth making even stronger, especially in the face of the new competition, which almost always makes a grocer better than before.

Read the complete story from yesterday's New York Times, "Trouble, Two Doors Down," here

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