• Growth in private label merchandise
The growth in private label merchandise is a huge opportunity for Reed because its shows consumers are paying attention to that. However, Reed is already providing a range of private label products but it is limited. This trend could increase sales and market share eventually for Reed. Private label merchandise are 17% of overall sales (page 3), which is 3% higher compared to the 14% in 2005. Private labels offer high profit margins to retailers like Reed. For example, the expansion of private label merchandise gives more options to customers who are looking for faintly lower prices but still relatively concerned about the quality of the products. This opportunity goes along with increasing …show more content…
Competitors are divided into two categories of lower end to upper end stores. There are limited selection stores, Warehouse Clubs, Supercenters and Dollar stores. The upper end stores pose the most threat to Reed but the lower end ones like the Dollar stores cannot be overlooked either. Reeds main competitors are Delfina and Whole Foods when it comes to the benefits they provide to their consumers. This is because they offer high quality and organic foods, higher prices, high service and pleasant ambience compared to the other stores. In the Columbus market, there are about 180 grocery stores that are under 15 different companies. However, Reed has 25 locations in the market but the lower end stores like the Dollar stores cover 7 of the 15 companies. This is very crucial. Although, Reed offers more than these lower end stores providing a one-stop store for consumers but due to the economic downturns (2008 to 2011) (page 4) consumers are trying to save money over the …show more content…
This will give the consumers a way to budget for items in bulk. Instead of consumers making regular stock up trips, they just make fill in trips to pick up a few things. Those fill in trips are usually directed towards low priced promotions markets like the dollar store. The supermarket poll data showed that 60% of shoppers did regular fill in trips that the 40% that did stock up trips(page 3).
• Reduction in Consumer Loyalty:
Regular weekly shoppers have been replace day savvier consumers (page 3). Consumers are now cherry picking locations with the best deals than sticking to one. Customer loyalty is the epitome of competitive advantage. The fact that Reed can not rely on consumer loyalty poses a huge