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Publix’s GreenWise Market opens its doors

BY DSN STAFF

Shoppers in Tallahassee, Fla., just got a whole new location to shop for their groceries.

Publix announced that its GreenWise Market has officially opened its doors in the city, which is right neat the Florida State University and Florida A&M University.

“With our new-format GreenWise Market, we will offer today’s natural and specialty customer the new and interesting products they are looking for while setting the stage to provide a uniquely different shopping experience,” Kevin Murphy, Publix’s senior vice president of retail operations said. “The customers in this growing market are looking for a brand they trust, and we are confident GreenWise Market will be their specialty, natural and organic store of choice.”

Featured in the store is a beverage bar that serves kombucha, local craft beer, wine, smoothies and locally sourced coffee, and a large mezzanine area to eat in.

In addition, the market will offer consumers a variety of such prepared foods as antibiotic-free meats, organic cheeses, vegan items, handcrafted sandwiches, acai bowls, gourmet pizzas, burritos, bowls and sausage that’s made in-house, the company said.

Local and organic fruits and vegetables, body care, natural vitamins, supplements, bulk items and an expanded line of GreenWise seafood certified by the Marine Stewardship Council is to also be featured within the store.

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Giant Food Stores to open smaller new store concept, banner

BY Marianne Wilson

Giant Food Stores is going urban — and smaller.

The 95-year-old supermarket company will debut a new store concept and banner, “Giant Heirloom Market,” designed for urban neighborhoods. The first location will open later this year, in the Graduate Hospital neighborhood of Philadelphia.

Giant has had a presence in Philadelphia since 2011, but the Heirloom Market store will be its first in the downtown area. The location is the first of several stores planned for the city.

The new store will be about 9,500 sq. ft., with a modern environment and an assortment of high-quality, fresh, seasonal, and flavor-focused foods and everyday essentials. Special features will include a “produce chef” who will prepare veggies and fruit on demand, local artisanal breads, and a vast array of plant-based foods. Also on the menu: sampling and demonstration. In addition, if customers need something that is not carried in the store, associates will help guide them to in-store iPads to order online.

The Heirloom Market format will harken back to the original Giant Market concept in its mission to bring innovation and modernity through a store experience that meets the unique needs of the neighborhoods it serves, Giant said.

“From featuring products made locally to being staffed by people who call the neighborhood home, Giant Heirloom Market is a true reflection of the surrounding community, and we can’t wait to see our shared vision come to life in just a few short months,” said Nicholas Bertram, president, Giant Food Stores, which has more than 170 stores in Pennsylvania, Maryland, Virginia and West Virginia.

The new concept comes after more than a year of intense neighborhood group listening sessions, market research, and format exploration. In addition, Giant searched nationally and globally for solutions, even going to Amsterdam, a city known for its innovative, small grocery stores, to find a format that would satisfy the community. Back home, Giant said it scoured Philadelphia for local purveyors who could help them deliver on the promise of a “neighborhood grocery store built by its neighbors.”

“Philadelphia is a natural choice for us to debut our new Giant Heirloom Market format, as we’re able to draw upon our passion for food and our fondness for local purveyors, all while leveraging innovation to bring something special to our new Graduate Hospital neighbors,” said Bertram.

Giant Food Stores is based in Carlisle, Pa., and is owned by Ahold Delhaize.

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Charting a path with private-label

BY Barrie Dawson

Drug store retailers willing to invest in a private-brand campaign that will attract new customers have a lot to consider. Their strategy must include everything from what a drug store really is to whether there is more room for innovation in the core health and beauty part of their business, or in food and beverage at the front of the store.

Let’s face it this is an omnichannel retail world, where drug stores and supermarkets look very much alike. Shoppers can buy refrigerated foods at the drug store, and they can fill their prescriptions at the supermarket. However, the private-brand strategies for both are not interchangeable.

“Food retailing and drug store retailing are two entirely different channels, and it is hard to imagine what a high-end drug store would offer that a low-end drug store would not,” Private Label Manufacturers Association president Brian Sharoff said. “There are categories that might allow for high-end, low-end differentiation, such as cosmetics, but for most of the health-and-wellness categories, the assortment would not change.”

And therein lies one of the fundamental differences between the supermarket landscape in the United States and the drug store scenario. There are dozens of supermarket chains, and most are regional. There are three major drug store chains — CVS, Walgreens and Rite Aid — and their reach is national.

One way supermarket chains use private-label products is to help establish identities to separate themselves from similar stores. Wegmans and Trader Joe’s, for example, are considered to be more high-end or upscale, while Aldi and Lidl are ultra discounters and Whole Foods Market takes its identity in a different direction by calling itself “America’s healthiest grocery store.”

The drug store chains don’t need to worry about that kind of differentiation because there are so few of them. Through consolidation, the major players eliminated the little guys years ago.

“Once you get to that kind of industry concentration, it’s not about differentiation, it’s about pricing power,” said Hart E. Posen, an associate professor of management at the University of Wisconsin-Madison’s School of Business. “With two or three big competitors dominating the industry, it’s not about rivalry because one firm knows that if they lower prices, the other firm will have to lower prices. If one firm invests in substantial differentiation, then the other firm will — and no one will necessarily be better off.”

Posen, an expert in corporate strategy, innovation and entrepreneurship, who earned his doctorate at the University of Pennsylvania’s Wharton School, said he sees parallels in the consolidations the drug store and airline industries have gone through. He pointed out that all the things the drug store industry has done to eliminate smaller drug store rivals has been undone by the emergence of new players in the pharmacy arena — big-box stores like Walmart, big grocery stores like Kroger, pharmacy benefit managers like Express Scripts and online shopping behemoth Amazon.

“That is why creating a sort of distinctiveness in their offerings is important,” Posen said of the drug store chains. “Why should I go into the Walgreens, which is two blocks from my house, rather than the Target store three blocks from my house? Creating that distinctiveness is important, but less so because of CVS versus Walgreens, and more so because of CVS and Walgreens versus the Walmarts and others.”

Through that lens, CVS Pharmacy, Walgreens and Rite Aid share the goal of enticing shoppers to come to their stores instead of taking their business to a nearby big-box or big grocery store, or buying pharmaceuticals online. The right private-label strategy must take into account all of a drug store’s competitors, not just the rival drug store around the corner, and it must yield a high-quality product that is both unique and of great value to the consumer.

Traditionally, private-label products are less expensive than their brand-name counterparts, and they provide a greater profit margin to the retailer. Sharoff said that the drug chains have been very aggressive in creating and marketing their own over-the-counter products, from cough-cold medications and dental floss to antacids — all with compare-and-save strategies that challenge the national brands at the shelf.

The question, though, is this: Are those private-label products enough to bring customers into the drug store?

Bill Bishop, chief architect and co-founder of Brick Meets Click, a retail advisory website, pointed out that private label has evolved into two types — traditional and new generation.

He defined traditional as “a label that obviously carries the retailer’s name, which purports to be as good as the brand, but really is never quite as good — but it’s close. I think the drug store business is still very much in the traditional private-label area,” he said.

Bishop sees new generation private label as an innovation — something new that resonates with the public. As an example, he pointed to how the Aldi supermarket chain brought foods with “clean labels” — products that contained nothing artificial — to the market.

“No one else in the private-label areas had clean labels, so here they are bringing products that are different and on trend,” Bishop said. “You want to be different by being more on trend with what people are looking for. What are the broader things people are looking for? Some people are looking for clean labels. Some people are looking for regular convenience. Some people are looking for better portion control. You’ve got to kind of discern what the trend is. New things that are on trend is the definition of innovation.”

Innovation is only one aspect of new generation private label. Bishop said the second aspect is unquestioned, consistent quality — no variance allowed. The third aspect is that the product must provide the consumer with great value — a combination of high quality and attractive price.

Bishop said the final aspect of new generation private label deals with the retailer: There must be an investment in the product, which not only includes the money needed for conceptualization and development, but also the willingness to take a risk and do the necessary marketing.

Sharoff said that PLMA’s annual trade show, which has been around for more than 30 years, can help retailers interested in innovation and development. They can inspect the latest products, meet the most experienced suppliers and come away with cutting-edge ideas.

What kind of cutting-edge idea should the drug retailer turn into a new and unique product? Perhaps an innovation in cosmetics would resonate with the public enough to warrant the expense and risk of product development. Of course, today’s drug stores carry food and beverages, too. Maybe there would be room for innovation there, even though it isn’t the store’s core component.

“That’s really the key question in this whole thing, right?” said John Stanton, a professor of food marketing at Saint Joseph’s University in Philadelphia. “It has to do with how developed the pharmacy is in terms of their pharmaceutical products and makeup. Have they gone about as far as they can in terms of making these departments as effective as possible?”

To illustrate his point, Stanton gave the example of a pharmacy that carried five different brands of aspirin. Should it add a private-label sixth brand — giving it virtually every aspirin on the market? Or should the retailer use its space in a different way, perhaps on a new food product. Which innovation would be most likely to drive significant sales growth?

While augmenting a store’s health and beauty collection with a sexy, private-label cosmetic might seem logical, Bishop and Stanton pointed out the pitfalls of that strategy.

“There’s a certain personal character to them,” Bishop said of health and beauty products. “No matter how good a new toothpaste is, I’m not sure I’m moving on from my Colgate. I have used Mennen deodorant for 30 years. I’m not sure what’s going to move me from that.”
As for cosmetics, Stanton said a new private brand might not appeal to many women and points to a private-label cosmetic by Costco that has been discontinued. He believes the better approach would be to try to convince a name-brand manufacturer to create a unique product for the drug chain that includes the manufacturer’s name, such as Revlon’s “It’s Terrific.”

Though many experts said food is an area of real private-label opportunity in the drug channel, David Rogers, president of DSR Marketing Systems in Northbrook, Ill., which offers consultant services to retail clients, is not so bullish.

“The story of drug stores selling more and more food is fallacious,” he said. “They are not doing a good job up front. In fact, their percentage of sales with pharmacy goes up every year. They are stuck at 1.5 % market share of the grocery market. They should be focusing their private-label efforts on health characteristics, whether it’s health and beauty, cosmetics, OTC drugs. In many respects, they are a female convenience store.”

While he doesn’t see drug stores making any headway with food, Rogers acknowledged that a potential for growth exists — if a drug store would invest in developing the right product. He believes drug stores could do well with grab-and-go meals and prepared foods, if the quality of their products was better.

The idea of a drug store being a convenience store also is an important one to consider. Rogers said. It’s a sentiment that Posen shared, noting that drug store retailers must realize that their stores also are convenience stores, and they would do well to see that as an advantage and exploit it.

“Walgreens and CVS have a bunch of very good high-traffic locations — either high-foot traffic in the big, urban markets or high-auto traffic — and convenient locations,” Posen said. “They have to make the absolute best use of that space because that’s what they have versus Target or Walmart. They have convenience. They’re close. They’re easy to get to, and they’re fast to get in and out of.”

The question, he said, is: “How do we leverage the space for those who are looking for quick and easy — not parking a long way from the door and walking through a giant store?”

The retailer who successfully answers that question is likely to put their stores a step ahead in the race for new customers.

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