business news in context, analysis with attitude

Interesting piece in the Chicago Tribune yesterday looking at how customers continue to "warm to the idea of buying milk, eggs and even fresh fruit at the corner drugstore," causing consternation and a loss of sales at traditional supermarkets. "These smaller stores really are right now a very formidable group," Mike Mallon, vice president of real estate for Dominick's, tells the paper. "Walgreens are popping up on every corner." And that's more than just hyperbole: for every Dominick's in Chicago, there are four Walgreen units.

"In [densely populated] areas like Chicago, we can put stores just a block or two apart, and they both will do good business," Walgreens spokesman Michael Polzin tells the Tribune. "Food is a very important convenience factor for us. It brings people in. If they need something for dinner, or just one or two items on the way home, they can stop at our store."

It is just another example of how traditional boundaries are breaking down, as retailers of virtually every stripe - mass merchandisers, supercenters, membership clubs, convenience stores and drug stores - try to attract the supermarket consumer dollar because of its frequency and certitude. (And that doesn’t even include companies like Home Depot, which are testing Dunkin' Donuts kiosks as a way of enticing customers.
KC's View:
While traditional supermarkets view this trend with justifiable alarm, what they often miss is that these alternative formats are looking for traffic, and don't much care what they’re selling. Which means that by really focusing on the food, mainstream supermarkets can create for themselves a differential advantage.

We happen to be in Boston as we write this, preparing to deliver the keynote address at the Boston International Seafood Show. And it occurs to us that seafood is a perfect example of an area that most c-stores, drug stores and mass merchandisers have no desire to get anywhere near.

That's an opportunity, folks. Go where other people don't want to go, give customers what other stores can't or won't give them, and do it with a level of expertise and using guerilla tactics that make the other guys nuts.