G pharmacy health and beauty care general merchandise

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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...
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