HBC: The Battle Continues

Sep 18, 2002

The September 2002 cover story of Grocery Headquarters, Winning Back HBC Sales begins, “Supermarkets have been on the losing end of HBC for nearly a generation. But grocery retailers can still win this battle, if they are willing to commit to the category.”

Grocery’s failure to excel in HBC has been tied to many factors, including a consumer perception that the channel is not price competitive, out-of-stock issues and being slow to market with new products.

The success of Wal-Mart, Target and others has not discouraged everyone. According to the Grocery Headquarters’ article, “The recipe for a successful turnaround begins with retailers fully committing to the HBC category, developing a fair pricing strategy and understanding the full context of what value means to a shopper. To help set the stage for supermarket’s improvement in HBC sales and share, retailers also need to pay more attention to new products, aggressively cross-promote the category and, above all, employ solution- selling strategies.”

Giant Food has developed a new HBC department concept, “Relax, Renew, Revive,” to influence consumers’ perceptions. The department employs nonlinear aisles to establish an identity separate from others in the store. It incorporates a wellness center and pharmacy at the front of the store to make an immediate impression on shoppers.

Dick Baird, President and Chief Executive Officer, Giant Food is optimistic about the “Relax, Renew, Revive”. “In the short time the store has been open, consumers have really responded to the change.”

Moderator’s Comment: Can grocery retailers win the
battle for HBC consumers from mass merchandisers?

As a channel, the truth is that grocery probably won’t
recapture much of the business lost to the Wal-Marts and Targets of the world.
A well-respected veteran grocery executive told us, not long ago, of the reaction
of President/CEO of a chain to plans to add greater emphasis to HBC marketing
and merchandising. “Did someone here forget that we’re in the grocery business.”
Anderson – Moderator

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