SpartanNash goes from no frills to sushi bars in Omaha
Talk about a difference of night and day. SpartanNash is transforming six stores — four No Frills and two Bag ‘N Save formats — into its Family Fare format, which includes dedicated organic food sections, panini and sushi bars, craft beer selections and Starbucks kiosks, according to the Omaha World-Herald.
The expansion of the Family Fare concept is not new to SpartanNash. Last November, the company announced it was converting six former SunMart Foods and Econofood locations in North Dakota to the Family Fare banner. It acquired the stores as a result of the merger between Spartan Stores and Nash Finch in 2013.
At the time the North Dakota conversions were announced, Meredith Gremel, vice president, corporate affairs and communications for SpartanNash, told MLive that consumers responded positively to Family Fare because of its product selection, focus on freshness and low prices.
In Omaha, SpartanNash is responding to competitive pressures from existing players such as Bakers and Hy-Vee as well as newer entrants such as Natural Grocers and Walmart’s Neighborhood Market.
Photo: SpartanNash
Mark Griffin, vice president for SpartanNash’s Omaha business, described Family Fare as a "friendly, service-oriented neighborhood grocery" to the World-Herald.
While the center store is somewhat reduced in the Family Fare format to make space for more fresh offerings, value and price are also a component of its marketing. SpartanNash offers a "Savings Zone" aisle, 10 for $10 deals and price freezes on staples.
Discussion Questions
Generally speaking, do you see Americans being more drawn to self-service or service oriented grocery stores over the next five years? How should SpartanNash handle the marketing of the format changes it is making in Omaha?
Poll
BrainTrust
Kevin Graff
President, Graff Retail
Americans generally speaking seem to want choice — choice in more food selections, and choice among service levels — high and “no.”
I live in the Omaha area. It is not your typical, Midwestern city in flyover country. There are five Fortune 500 companies headquartered in Omaha, not to mention the university, medical center and other colleges. In short, it is a highly educated market with many professionals. It is a market that desires and craves a diversity of choices, especially in food!
Omaha consumers certainly support the “low” service options focused on price. There are a number of Walmarts, Sam’s Clubs and a Costco. But Omaha also supports Whole Foods, Trader Joe’s and specialty food stores.
The interesting thing related to the SpartanNash store conversion is how extremely difficult it is to compete on just “no frills” and price. In a professional market focused on healthy choice, Omaha represents a great opportunity for SpartanNash to go upscale, if they can differentiate their value proposition.
SpartanNash needs to first promote the basic and growing trend of Americans trying to eat more healthy, authentic and organic food. This is an obvious but challenging change from advertising “low price.”
The second fundamental for SpartanNash: Go study Wegmans! There is no one better in retail in terms of orchestrating a customer experience and service that brings people back to stores for great food and the experience itself.
I think what this reinforces in the ongoing polarization of the market — “high end/high-service” and “low price/self-service” are both dominating the market. The place NOT to be is stuck in the dreaded middle.
Having said that, there’s a gap in many cities (as noted by Chris above) in the higher-quality/higher-priced grocery market. A strong play on the health angle makes perfect sense.
I believe two grocery store formats will emerge: self-serve and experiential. The first will focus on price and convenience. The second will be an experience-rich destination, featuring same-day or next-day food consumption.
I think the growth area is in interactive shopping, where shoppers enjoy more than an experience but can learn and make better informed choices about the foods they purchase and consume. The shrinkage of center store is inevitable as other channels can do a better job of selling this often more commoditized and price-sensitive space.
SpartanNash is smart, because it’s going to be like this: if I want service and experience, I go to a store; if I want self-serve, I go to Amazon Fresh.
Amazon just announced that they’re going to give “free same-day delivery” to Prime users, which plays really well to grocery, obviously. What do you want to make for dinner tonight? Click—it’s here. BUT—if I want to have someone show me HOW to make it, and actually see what it should look, smell and taste like, I go to SpartanNash (or Whole Foods or HEB, etc.).