Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
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ing of the market provide them a huge advantage on product cost, equaling lower prices and investment in building new stores," says Rosenblum. While that may be the case, several large chains have failed at building smaller stores or convenient formats, Rosenblum notes. In 2008, Walmart opened four Marketside convenience stores in Arizona, only to shutter the shops by late 2011. Instead of moving forward with the Marketside concept, the grocery giant decided to take what it learned from the experience and apply it to its Walmart Express stores, then under development. Pricing can be a delicate challenge. Customers expect to pay higher prices at convenience stores, but prefer not to be insulted with egregious markups, Rosenblum says. "Traditionally, conve- nience stores are more expensive than grocery stores," he explains. "However, the continued growth and evolution of private-label or own brands have made convenience stores much more competitive with traditional grocery." Tips for Retailers Entering the Market Even with these challenges, new consumer shopping habits, coupled with an expanding and fluid definition of convenience, make it an ideal time to jump into the micro-grocer game. A tight focus can make for a more successful venture, Rosenblum advises. "One-store or single-location operators tend to do better, because they can focus on the right shopper and become symbiotic with the community," he explains. Competition from larger chains can still pose a threat, especial- ly as executives implement updates. With grocery stores increasingly carrying specialty products and fresher offerings, competing on the small scale can be an uphill battle. At a recent investor presentation, Kroger Company CEO Rodney McMullen explained how his company is catering to con- sumer desires. "Shoppers want a one-stop shopping experience," he said. "They don't want to have to go to all of the specialty retailers to get healthy and organic products." Still, Rosenblum believes, chains must toe the line to find the perfect balance. "Rolling out a chain is a difficult proposition if you don't get the location, store offering, and pricing right," he says. At the end of the day, NACS' Lenard asserts, the desire for convenience is at an all-time high, and any store that enters the mar- ket should be ready to offer it. "The value of convenience continues to increase," he says. "It doesn't matter what the format is; people want convenience. If it doesn't act like a convenience store, it's an inconvenient store." Emily Crowe is a freelance writer and regular contributor to Specialty Food News. Each Peach PHOTO: EACH PEACH Green Zebra PHOTO: GREEN ZEBRA 34 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com