Customers may want departments such as floral and service seafood but not all stores can support the labor overhead associated with delivering that level of service.
Giant Food has found it is facing that very situation and has responded by turning 55 seafood and 62 floral departments in "low-volume stores" from service departments to self-service centers. The company has looked to reduce costs while it touts low prices in the markets it serves.
Many of the chain's competitors, such as Safeway, have gone in the opposite direction by moving to more service-oriented operations as a means to differentiate themselves in the marketplace.
Giant spokesperson Barry Scher told The Washington Times, "The food industry has changed, and many of our competitors have moved from this particular model."
By going to more of a self-service operation, Giant is banking that it can keep stores stocked and laid out to make it easier for customers to take care of themselves.
Jim Hertel, managing partner of Willard Bishop, said Giant and others are not alone in seeking out a new position in the current competitive environment. "Midtier, traditional supermarket operators ... can find themselves in a quandary," he said.
"It's real clear that the decision to go into a service facility [to prepackage goods before coming to the store] or do self-service has got an awful lot to do with the brand image you're trying to create," Mr. Hertel added.
Mr. Hertel said "fresh-format" stores, such as Whole Foods or Wegmans, want to be known for service and freshness, so they have improved their specialty departments. Discount chains, such as Wal-Mart, have gone Giant's route and made their specialty counters self-service.
Discussion Questions: Is Giant Food's move to self-service in low-volume stores a positive in markets where so many of its competitors have a high service profile? Will Giant's focus on self-service reduce costs enough to allow it to support a low-price position?