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How to Fight Wal-mart? Sell Better Food!

walmartNo big surprise in the Wall Street Journal's recent article about local businesses suffering when a Wal-mart comes to town. But there's also some interesting advice for small business owners and local grocers when it comes to staying alive. For one thing, the article cautions these businesses against trying to match Wal-mart on price, suggesting that this will simply compound the problem, reducing sales by 25% rather than 17%. When I worked for Best Buy, we acknowledged that trying to beat Wal-mart on price was a losing game, so we focused on things they couldn't do as well as we could, like provide technical advice, superior service, and better selection. Kusum Ailawadi, professor of marketing at Dartmouth, suggests much the same for local grocers: increase variety, pick up the long tail, and focus on quality. Wal-mart is built for selling huge quantities of non-special things. Sell special things instead. According to the article: [Ailawadi] says that local retailers should generally move away from lower-tier products and expand their product assortment to different brands, such as natural or organic items. There you have it. Want to beat Wal-mart? Sell natural, organic, local foods. For some consumers, quality always trumps quantity, especially when it comes to our food.

Comments

There will always be room for a small retailer who caters to a self-selected clientele with more discriminate tastes...if they build a better experience, their prices won't matter that much. There is a positive to Wal-Mart's foray into a broader organic selection. I think Wal-Mart is like the largest supplier of organic milk in the country (or was at one time). I personally see their low-prices on organic foods-- which beat out places like Whole Foods, another giant corporation that has been criticized for misrepresenting the farmers they supposedly stand behind-- as a way to bring the organic food movement to the mainstream public. It means organics aren't just for the foreign car driving, 5 dollar designer coffee drinking, yuppie anymore. For those who believe that organics = better health, this would be good from a public health perspective, too. And doesn't a greater demand for organic food, drive the market overall? The small farmer may not benefit from this, but someone is sure making money off it as the number of organic products has exploded in the marketplace in the last 5 years. We'll have to discuss in person some time...I can't write it all ;) .
Yes, yes, yes! But there's also a fear that the meanings of the words are changing along with the labels. Does organic equal organic, whether it's from a local co-op or a far away conglomerate? What exactly do we think we're getting when we buy organic? Is that what we're truly getting? Is that what we really want? I keep going back to the idea of knowing where the food comes from, as opposed to what's on the label... Tomorrow's post will be about a company called Find the Farmer, and about how they're addressing both issues. Same theme, different approach. (I'm also taking a Whole Foods tour in the next few weeks with a store manager who I challenged recently. I'm looking forward to that, and to writing about it too.) And I'm ESPECIALLY looking forward to our in-person discussion. In the meantime, thanks for writing!
[...] 6 years ago. The new website allows people who buy Stone-Buhr all-purpose whole wheat flour in Wal-mart, Safeway, and other grocery chains to enter a code and get information about where the flour comes [...]
Even simpler than providing increased selection: just provide friendly, humane service. I always feel like a cog in a gigantic machine at Wal-Mart. It doesn't matter where, I've never been to a Wal-Mart where I feel like a valued customer. Rarely can employees answer my questions, even more rarely do they ask. For me, kindness is a premium.
Thanks for the post, Lee. Part of the challenge of competing in a well-established category against a dominate player is having to play by the market leader's rules. In Wal-Mart's case that is a sure-fire way to fail as you mention. Instead, "foodpreneurs" should be working on creating new food retail categories that take a unique approach to engaging customers. If customers get the sense that it is "basically the same" as established players, whether Wal-Mart or some other national supermarket chain, chances are profits will suffer. New formats must be unique and something a business can defend over time. The good news is that the problem of getting natural and organic foods to the masses is a long way from being solved. There is plenty of room for innovation and I for one look forward to the challenge. Cheers, Rob Smart http://Twitter.com/jambutter
Hi Peggy, Amen to that! Thanks for writing in. -Lee
[...] Lee at Simple, Good, and Tasty shares a novel approach for how local small businesses can and should compete against Wal-Mart. His idea? Sell better food. [...]
[...] problems. Nevertheless, Lee Zukor, on his excellent blog Simple, Good and Tasty, has a great post up on how small businesses can outwit Walmart. To wit: When I worked for Best Buy, we acknowledged that trying to beat Wal-mart on price was a [...]
For me, part of organic is who is manufacturing it (check out who owns what https://www.msu.edu/~howardp/organicindustry.html). So I agree with what you said about larger corporations changing the nature of organic (Michale Pollan talks about factory organic in Omnivore's Dilemma).
Thanks for the thoughtful comment and the useful link!

selling food online

Have any of you actually are walmart food. I live in the north east, and i find walmart food to be total shit. Granted shreaded wheat is still shreaded wheat no matter where you get it. BUt, ive never got hamburg in a tube so i was compeled to try it. You could almost taste the machine that molested this ground meat product into its tube. I tried the frozen whole chicken leggs that same week on the smoker to make BBQ. One bite and i imeditally called the pizza guy, the dogs will eat chicken tonight. Again with the steak, it had to be weeks or months old, and had been injected with so mant chemicals, you didnt need to salt on it or use and steak sause at all, and ill tell ye, their steak was total crap. Ive also tried all the so-called fresh produce, but after 2 of the 6 wattermelons you attempted to buy over the course of 2 weeks are rotton from the inside, well, it really discourages you. And the deli, well, the deli workers in my local walmart are so slow, i havent had the patience to get anything from their deli yet.
In my opinion, the drinks and canned goods from walmart are the same everywhere, the meat and produce absolutly suck, and are a big waste of money.

True story: My kid works at walmart, they had a steak and seafood party at the local walmart. All the meat and seafood were purchased at our local deli/meat market, not at the walmart the party was thrown by, looks like management knows their meat sucks and wont feed it to their employees, LMAO!

Thankfully some bloggers can still write. Thank you for this article..

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