Would organic grocery stores do better if coupled with conventional food stores?

Discussion
Schnucks’ EatWell (left); Schnucks Express (right) - Source: Schnucks
Aug 30, 2022

In 2020, Schnucks opened EatWell, A Natural Food Store by Schnucks in Columbia, MO, with a focus on natural, organic, local and specialty products. Last week, the company opened a mini-Schnucks Express next door featuring many customer favorites available in traditional Schnucks stores throughout the Midwest.

The Schnucks Express occupies about 11,000 square feet of the 42,000-square-foot building. It has its own entrance but is also accessible through the EatWell store. The average Schnucks is around 60,000 square feet.

“After listening to our customers’ feedback, we’ve learned that they enjoy the natural and organic offerings available at EatWell but also are seeking the convenience of conventional grocery items,” said David Isinghood, Schnucks’ senior director of EatWell/health & wellness. “We invite our customers to stop in and see both the expanded selection of traditional customer favorites as well as the enhanced shopping experience of the natural and Good For You items at EatWell/Schnucks Express.”

Americans’ appetite for natural and organic foods has grown steadily over the past few decades, but price has long been seen as a barrier and many Americans maintain a strong affinity to their favorite conventional foods.

A Consumer Reports survey of 2,200 U.S. consumers, taken in April, found fruits and vegetables continuing to be the dominant category where consumers seek out organic options. Asked which categories they bought food labeled “organic,” fruits and vegetables were cited by 62 percent, followed far behind by eggs, 37 percent; meats and poultry, 35 percent; dairy (i.e., milk, cheese, yogurt), 32 percent; packaged foods (i.e., cereal, pasta, rice), 20 percent; bread and other baked goods, 16 percent and frozen meals, 11 percent.

Asked to compare organic to conventional foods, organic scored favorably for being better at limiting exposure to synthetic pesticides or fertilizers, their impact on the environment and the treatment of farm animals. However, 44 percent felt organic foods were about the same in nutritional quality versus 41 percent viewing organic as better. Asked about taste, 52 percent viewed organic as about the same as conventional foods, with 31 percent viewing organic as better tasting.

DISCUSSION QUESTIONS: Does Schnucks Express, featuring conventional food favorites, complement Schnucks’ EatWell concept? What’s the likelihood that the Schnucks Express/EatWell pairing will find more success than EatWell on its own?

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Braintrust
"Yes, the two should complement one another. Consumers cross-shop, visiting three to five stores per week depending on various factors."

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14 Comments on "Would organic grocery stores do better if coupled with conventional food stores?"


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Katie Thomas
BrainTrust

Yes, the two should complement one another. Consumers cross-shop, visiting three to five stores per week depending on various factors. Let’s stop pretending they get everything at one store, in one trip.

Michael La Kier
BrainTrust

People are complex and irrational. Very few people “eat well” all the time, so offering natural and organic offerings with conventional grocery items is a smart recipe for success. A wider assortment beyond organic/natural only can help attract more traffic.

Dr. Stephen Needel
BrainTrust

I’m a big fan of Consumer Reports, but their surveys are heavily biased, geographically and economic-status wise, so take it with a grain of salt (or salt substitute). Natural/organic stores have a dilemma – they can promote their “healthiness,” which is why you’d spend the money, or they can dilute their position by allowing in conventional items. I think you have to pick your position – are you a grocery store with organics or are you a natural/organic store? If the latter, leave out the other stuff.

Lucille DeHart
BrainTrust

Like anything else, consumers have blended preferences. From shopping Neimans and Target to specialty foods and mass grocers. The average consumer will pick and choose what they are willing upgrade for and to invest in and where they just want value and basics. The same is true in the grocery industry. Placing Express/EatWell together should help meet this behavioral need. As long as there are shared carts and check outs, this should be a win-win.

Neil Saunders
BrainTrust

The vast majority of people mix and match their grocery brand and product selections. Some heathy, some organic, some indulgent, some value focused, some convenient. Very few consumers shop exclusively in one pool, such as only buying organic or healthy across everything. As such, it makes sense for retailers to cater to a wider variety of needs. There is also a lesson for Whole Foods in here which still doesn’t stock many brand names that its customers buy elsewhere because they are “unhealthy.”

Gene Detroyer
BrainTrust

We do about ninety percent of our grocery shopping at Whole Foods. But there are some items that we prefer that are just not available. Save us a second trip. Make those items available by just walking through a door.

Janet Dorenkott
BrainTrust

I think it will do well. Working moms and dads struggle with time. The need to divide non-working hours between extra-curricular activities, kids sports, homework, family time, laundry, shopping, etc. means you need efficiencies. We want to give our kids the healthiest options, but we also have the need for conventional items. When limited by time, I often choose traditional grocery stores because I can get more shopping done in a single trip. In addition, inflation is forcing families to look for more affordable options right now. I think Schnucks’ decision is well timed and will offer a great option for their customers.

David Spear
BrainTrust

The Express/EatWell combo makes sense and should perform very well. Definitely, we’ll see many of these concepts pop into markets around the country. Saves time, saves gas (driving to another store), enriches the experience and, hopefully, provides the consumer with a healthier diet.

Gary Sankary
BrainTrust

Tier one grocers have been mixing organic foods into their assortments for a long time. So much so that many coops and traditional “natural” foods stores have started emphasizing local to differentiate themselves.

I think Schnucks is behind the trend here. Rather than opening a separate store, they would be better served by diversifying the offers in their main line locations. On the one hand, they are saying that their customers want organic/natural and they want some conventional products. Why not make it easier for them to cross-shop these items by category instead of making them shop in separate stores or different departments?

Ken Lonyai
BrainTrust

What is the point to EatWell if it’s paired with a conventional store anyway? It sounds like the lesson learned is that a stand-alone organic store won’t be as successful as keeping a conventional store approach and increasing its organic food SKUs and possibly segregating them in a more concentrated way. Pairing two stores and brand identities (based upon Schnucks reporting) means unnecessary consumer confusion and unneeded expense.

Craig Sundstrom
Guest

I’m a bit confused: is this a “normal” Schnucks Market? The story implies it occupies 31Ksf, which is only about half the size of their average (per the story), and “express” usually indicates some kind of abridged format, but it still seems quite large (The press release said it was a pre-existing store, so perhaps that explains the incongruity).

But back to the question: I think this may be one of those cases where theory and reality diverge. In theory, the answer is “yes … of course!” There are considerable synergies — for everything from advertising to parking and utilities — and “the more the merrier” prevails; in practice, though, I have an uncomfortable feeling the two divisions will be in competition with one another, which will inevitably serve to the disadvantage of the weaker performer … which I fear will end up being the Organic component.

Christina Cooley
Guest

Organic grocery stores can largely benefit by merging with a conventional food store offering. Though there is absolutely a niche of customers who will be drawn to organic grocery stores, there’s a much larger target market in catering to customers who are desire to purchase healthy and organic foods while recognizing that those same customers will need additional groceries that can’t always be found in organic grocery stores. Providing convenience and a robust selection of offerings is a recipe for success. The less customers have to run around to shop for the things they want and need, the happier they will be, and then all that spend is taking place at few locations which is definitely a win-win!

Brad Halverson
Guest

Instead of two stores, the best option here for the customer experience (CX) would have been to eliminate unnecessary doors, entrances and duplicate departments, and bring product together. Then market and story tell around offering the best of both worlds.

Many independent grocers already embrace a successful strategy of both conventional and “healthful” together, being intentional to express both in store design/decor, signage and without any brand confusion. Seeing shoppers fill their carts with both kinds of products in one trip will confirm many consumers aren’t “either/or,” they are “both.”

tagrain
Guest
tagrain
2 months 27 days ago

On paper, this seems like a great strategy since they get to present a single unified front and drive more opportunities to upsell and cross-sell. However, organic grocery shoppers buy fewer items but are willing to spend significantly more, especially for niche items. And conventional shoppers purchase a higher volume of goods during each trip, so they won’t seek out niche products with high prices the way organic grocery shoppers do. So instead of customers accepting them as one division, they may end up choosing one over the other.

wpDiscuz
Braintrust
"Yes, the two should complement one another. Consumers cross-shop, visiting three to five stores per week depending on various factors."

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