The Overnight Makeover: Could Southeastern Grocers Be a Cinderella Story? 

16 Nov 2016

By:

• Diana Sheehan

Just in case you missed it, today Southeastern Grocers made a powerful statement to the grocery industry – both to its competitors and its manufacturing partners.

This morning, shoppers at 73 stores in Florida, Georgia, and the Carolinas woke up to new stores in their neighborhood. With short notice, and extraordinary execution, Southeastern Grocers closed the stores – including all 55 current Harveys stores in Georgia, 10 BI-LOs in the Carolinas and Georgia, and 6 Winn-Dixies in Florida, and opened them within 24 hours under the overhauled Harveys banner that has been redesigned to better serve lower-income shoppers with more relevant selections and value prices.

While the overnight makeover isn’t new news to those working with Southeastern Grocers, the scale of this transition is unprecedented in the U.S. grocery landscape. This is another demonstration that the company hasn’t been shy about trying new things that focus on its shopper, including the new Fresco y Mas concept store targeting Miami’s Hispanic shopper.

In an interview with Supermarket News yesterday, CEO Ian McLeod was clear that Southeastern Grocers is focused on long-term success. He states “In order to compete effectively in the Southeast we have to be able to deliver a format that is relevant for the shopper in each community you serve, as opposed to a homogenous approach we may have offered previously.” 

McLeod touches on those critical elements that we at Kantar Retail have been touching on for some time. As the shopper landscape evolves and becomes more complex, retailers and their supplier partners must evolve to offer unique value to each community they serve. The world of one-size-fits-all retail is a relic of the past.

In the short term, there are a couple of things to consider for various industry constituents.

For suppliers:

• Re-evaluate how you work with Southeastern Grocers. Harveys, as a banner, and the low-income shopper, as a focus, seem to be the driving force behind its growth strategy in coming years.
  • Is your assortment aligned to this shopper?
  • Does your pricing strategy support Harvey’s new approach
  • How does merchandising work within the new Harveys format?
• Invest time in understanding some of these new battleground marketplaces, such as Charlotte, N.C., and work with internal marketing teams to see how you can customize brand messaging and even product innovation to meet specific retailer and shopper needs within the area.
• Visit a new Harveys store. I know this sounds overly simplistic but observing these evolved formats in person is the best way to grasp some approaches to retailing to low-income shoppers. If you want help, reach out to us and we’d be happy to walk some stores with you.

For retailers:

• Consider how you are aligned to the low-income shopper. While some retailers that target high-income shoppers may be somewhat protected, most U.S. retailers today must have a strategy in place to target this growing, and increasingly diverse, shopper demographic.
• As with your supplier partners, pay attention to some of these newer battleground markets and learn from the diverse strategies employed by retailers that are succeeded or struggling to succeed. 
  • The Charlotte metropolitan area will be a fascinating grocery retail microcosm to observe in 2017, with the Harveys’ transition, a possible Wegmans opening, and Lidl entering the fray. 
  • Mainstream retailers like Food Lion will need to evolve quickly to identify and promote a point of differentiation in some of these critical markets.
• Shopper insights and understanding must be a constant component of your insight platform.
  • Shopper needs are changing, but the fundamental reasons for shopping remain the same.
  • Shoppers demand value, convenience, and assortment. They want experience.
  • How can you tailor your in-store value proposition to uniquely play in one or more of the four basics of shopper success?