Case Study Reed Supermarket

The biggest problem Reed Supermarket is facing is the loss of their market shares to their competitors who offer similar products for lower prices. The rise of supercentres, warehouses, and dollar stores alike have demonstrated the buying habits of today’s cost-conscious customers. Sales have declined in Reed Supermarkets, the change being -0.05% over five years from 2005-2010 with customers citing high prices as a deterrent. In 2010, a household in Columbus makes an average of 2.1 weekly trips to the supermarket spending an average of $5,200 annually on grocery items. This means the average household spends approximately $47.62($5,200/(2.1 trips a week * 52 weeks in a year)) per trip. One of the reasons for this is households are no longer …show more content…
Therefore, this case analyzes the characteristics of Reed Supermarkets and its market strategy against each of its competitors and seeks to figure out ways to attract loyal customers back into Reed Supermarkets to drive traffic and sales …show more content…
While some customers recognize this differentiation and are willing to pay more other customers are not concerned with it as much. In the psychographic segmentation, the customer’s shopping habits is searching best deal with lower price and high quality product. In a recent survey conducted by Reed of 400 customers in the Columbus area, 75% of the customers place great importance on price when shopping and 62% prefer to shop at stores that provide discounts and coupons. However, there are many customers that have become more health-conscious over the years, therefore are will to buy the health and organic products offered by Reed regardless of the price. Moreover, out of the 250 non-customers who Reed surveyed, the main reason why those customers were not shopping at Reed was because they were able to find better prices at other