business news in context, analysis with attitude

by Kevin Coupe

I've written here before of the regular "Around The Store" emails that I get from Stew Leonard Jr., CEO of Stew Leonard's, the store in Connecticut where I have done much of my food shopping over the past four decades.

These emails generally are engaging, informative and entertaining - I've found that they do an excellent job, especially during the pandemic and subsequent period of inflation, of positioning the company's seven stores as being agents for its customers.

But this weekend's email caught me by surprise - because it demonstrated a level of confidence that was extraordinary, even for Stew Jr.

This week's "Around the Store with Stew" had more than a dozen items, ranging from a remarkable candid description of customer complaints to a sharing of a video showing Stew Jr. dancing with one of his daughters at her wedding.

But it was the second item that really grabbed me:

Amazon Fresh just opened in Paramus, NJ. I visited last Saturday with my nephew Jake. If you want to see an ultra-modern store, go check it out. They are also opening in Danbury and Westport, CT. First, you scan your Prime app as you enter the store. Then, there must be 1,000 cameras in the ceiling recording every item you put in your cart. Everything is by the UNIT. Honey Crisp apples are 99 cents EACH. It’s like what Trader Joe’s does with their bananas. Met a customer in the store from Stew’s and he recommended we get their Rotisserie Chicken. We “bought” one… meaning we just walked out of the store without going through a check-out lane. Amazon recorded all our purchases and simply charged our account. Problem is, I looked at a cookie package and Nutpods in the dairy aisle and then put them back, but I guess we didn’t put them back in the right spot. We were charged for those two items along with the chicken. Like all new stores, they have some kinks to work out, but it’s worth a visit.

Really?  It's worth a visit?

When was the last time you saw a retailer recommend that customers go visit a competitor?'

I've been doing this a long time, and I can't recall it ever happening before.

Now, let's be clear - Stew Jr. is using the recommendation to draw some clear lines of differentiation between his stores and the Amazon Fresh.  He's arguing that his price of apples ($2.99/lb. vs. 99 cents apiece) is lower.  And, he's pointing out that there may be some flaws with the technology.

But, implicit in Stew Jr.'s email is enormous confidence that Stew Leonard's value proposition - strong on fresh, terrific theater, sharp pricing, and a limited assortment of some 1,200 items - can compete effectively with Amazon Fresh - in fact, he's confident that if you compare the two, you'll prefer Stew Leonard's.

That's pretty gutsy.  It's also an Eye-Opener - because if you don't have a value proposition and the kind of differentiated brand equity that would allow you to make the same argument, the there's a question that you need to answer:

Why not?