Delhaize America knows one-size does not fit all. That much is clear when looking at what is happening at its Food Lion business where three distinct formats - Food Lion, Bloom and Bottom Dollar - have been developed to meet the needs of the diverse consumer groups the company serves.
Food Lion
The chain's main business is looking to become the anti-supercenter in the minds of consumers. The company is focused on smaller stores and convenience (departments grouped in a logical, complementary flow; prepared foods close to entrance for grab and go).
Bloom
Smaller stores focused on fresh and using technology to help sophisticated consumers
do it themselves. Karen Petersen in Bloom's media relations described the operation
to PL Buyer as being "a specialty store with traditional grocery store
pricing."
Bottom Dollar Food
Food Lion's extreme value format comes with a twist. The company puts much greater emphasis on fresh than others in the same space.
"Food Lion's development of store formats targets both up (Bloom's) and down (Bottom Dollar) market opportunities and is perhaps the boldest initiative yet by a large grocery chain to make clear and distinct offers to certain shopper segments. These new formats have been designed with a lot of thought to the needs of the target shopper segments and in terms of how to execute profitably against these needs. The new formats offer two additional growth platforms for Food Lion, both of which should produce above-average performance." - Bill Bishop, President, Willard Bishop Consulting
"The mass market in America no longer exists except if there is only one store in town. The concept of market segmentation by format has generally failed in the USA, but is the norm around the world. The difficult task is keeping true to the concept over time. Just because it is a good deal does not mean the item should be stocked in all formats. Certain economies of scale are lost with different formats, but the go-to-market path should be different anyway to be successful." - W. Frank Dell II, CMC, President, Dellmart & Company
"We have been talking about customer centricity, enhanced shopping experience and occasion based merchandising for a long time now. It's refreshing to see a retailer introducing these concepts into their business. However, such a large-scale change affects the entire company. Re-education to corporate and store teams needs to be completed. Business process re-engineering is key to ensuring that these new concepts and strategies are supported. This isn't going to happen overnight." - Shaun Bossons, Executive Vice President, US, Galleria Retail Technology Solutions
Discussion Questions: What are you looking for from Food Lion in 2007? What can others learn from Food Lion?