business news in context, analysis with attitude

We had a story yesterday about how a piece in the Harvard Business Review recommended the ways in which to compete with Wal-Mart…ways that seemed fairly elementary to us. (But what do we know? We didn’t go to Harvard.)

But MNB user Mark Heckman drew a good analogy:

The Harvard analysis reminds me of the old Steve Martin comedy routine on the steps to become independently wealthy. His first step: get a million dollars, then…

One MNB user had some thoughts about Albertsons’ decision to convert some Florida stores to its discount format:

Converting weak stores to a weaker no-frills, reduced inventory format is the same last ditch effort we have seen repeated time and time again with little success. Fleming tried it and failed. A&P doesn’t appear to be too successful with Food Basics in the USA, Nash Finch tried it with WFO and we don't see them pushing that format anymore. Considering Albertson's notorious reputation for high prices, I have to wonder what they are thinking. I have clients who have stores nearby some of these converted Albertsons stores in Louisiana and they are all reporting strong sales increases in their stores. That's proof enough for me to where Albertsons is heading with this format.

But another MNB user had a different take:

Just responding on the new format as I am intimately involved with Albertsons. The following information was sent to me from a major vendor that lives in the area.

I went into a Super Saver today and this is what I found: A VERY busy store. When this store was just an Albertsons store, the parking lot was never very full. It was packed. They do not accept American Express, they only accept cash, debit card, or Discover. The products in the store are very ethnic, particularly Hispanic.

They are not using Albertsons Private Label products. In fact there was no mention of Albertsons anywhere in the store. In grocery they had a lot of Surfine products. The bread was a generic name, but was made by the Braid bakery, which is "the" bread of Texas.

Eye Care Private Label is Top Care. That was the label that Tom Thumb used years ago.

When an Albertsons Category Manager told me about the Super Saver stores in the beginning, I understood that they would be operated completely separate of the regular stores. Therefore, I have no idea where they are getting their product, who controls the distribution, the product mix, the set, and the pricing.

I will say the pricing is much better than an Albertsons store in this market.
KC's View: