This preview shows page 1. Sign up to view the full content.
Unformatted text preview: at can be offered (e.g., pharmacy, health and beauty care, general merchandise,
photo-finishing, dry cleaning, flowers, music, videos, books, printing, postal services, and travel
services). Recently, banking services were introduced in some stores through PC Financial
(www.preschoice.financial.com) in collaboration with the Canadian Imperial Bank of Commerce,
one of the largest banks in Canada. This movement to one-stop shopping is a worldwide trend in
the grocery industry. Responding to Consumer Preferences
Loblaw is alert to market trends. Information on consumer spending patterns and product choices
comes from three main sources: product sales data, customers, and vendors. Store managers
monitor changing purchasing patterns in their stores and division category managers interpret
trends from aggregated sales data.12 Sales of each item within a category also are monitored.
Loblaw is able to track sales and revenue trends and its share of the market for individual items
through its subscription to surveys conducted by AC Neilson. From the retailer’s perspective, it
is preferable to have national rather than regional brands with fewer vendors. Category
management is widely regarded in the industry as a blend of financial analysis, demographic
changes, and “gut feel.”
Customers are surveyed in a sample of stores, providing satisfaction data on each department.
Surveys and focus groups are conducted outside the stores. Each year, vendors approach Loblaw
with several thousand new product options, of which a small percentage will be accepted for trial.
These offerings represent the suppliers’ assessments of market developments. Only a few of
those products accepted for trial ultimately are successful with consumers.
Catering to the needs of particular customers is increasing. Within stores, products reflect the
needs of groups such as families, the elderly, vegetarians, diabetics, the health conscious, etc.
Products are sold in large sizes known as Club PackTM for the bulk buyer, while older customers
need smaller packages and larger labels. In recent years, Loblaw has responded to the growing
demand for “meal solutions.” Thus, food sometimes is grouped less by department, but rather by
how it can be combined to make a complete meal.
Given the time pressure on consumers, convenience and speed of service are increasingly
important. Loblaw has responded with accessible layouts and improved checkout technology to
speed the checkout process. The importance of speed is reflected in the shift from buying
ingredients to buying ready-prepared meals. In the United States, 50 percent of consumers’ food
purchases are from restaurants, fast-food outlets, and ready-to-eat meals. The figure in Canada is
38 percent, and is increasing by about 2 percent per year.13 In 1997, supermarkets ranked third
(17%) after fast-food outlets (35%) and conventional restaurants (26%) as a source of take-out
food. In response, Loblaw is expanding the availability of ready-prepared meals, sa...
View Full Document
- Fall '08