FR Buyer: Is SKU Rationalization Impeding the 'Buy Local' Opportunity?
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
"Foods with a local or natural connotation to them have much more potency with consumers than the average retailer thinks. If you are really good at serving that up, you attract a fast-growing and profitable segment of shoppers who are willing to pay more for what they want."
Bill Bishop, best known for his years running Willard Bishop Consulting and now chief architect at Brick Meets Click, was sharing his thoughts with me about Fred Meyer's promotion of local products.
I'd told him how the chain's fliers stress local produce and feature photos and stories of the farmers who grow it. Bill and I agreed that more of this can and should be done, across a wide range of products. Plain and simple, storytelling rings the register, especially when it comes to better-for-you products made not far from home. Shoppers really want to help out family farms and small, local businesses.
All this runs counter to a growing perception among some retailers that only two — or maybe three — SKUs are needed in each category. Economies of scale, slotting fees and funny money all drive the continued trend to SKU irrationalization that plays into the hands of big vendors. But I'm getting a sense that some of the best-practice (or better-practice) retailers are getting away from this and starting to pay more attention to the local vendors to whom consumers are attracted. There's certainly differentiation and loyalty to be gained here, and it fits into the needs of what my old pal Bill calls "a fast-growing and profitable segment of shoppers."