Call it the big squeeze.
Traditional grocery stores, facing increased competition from discounters and upscale players, are caught in the middle.
There's pressure from cost-conscious consumers, who have gotten used to depressed prices during the downturn. Other shoppers are demanding higher-quality products, including organics, but want to save on those, too. On top of this, higher food prices are being instituted and could encourage more consumers to shop discount. So some big chains are having to adjust.
Jewel-Osco parent, Minneapolis-based SuperValu Inc., announced last week that it will close about 20 underperforming stores around the country. The company also confirmed that it has asked corporate employees to take unpaid time off between the beginning of this month and Feb. 26, when the corporation concludes its fiscal year.
Earlier, the company unveiled plans to double the number of its Save-a-Lot dollar stores, to 2,400 locations, over the next five years.
"We're in a very competitive industry and we're looking at every area of the company to lower our operating expenses," a SuperValu spokesman said, adding that "while the decision to close stores is always difficult, SuperValu has to respond to what's best for the long-term success of the overall company."
Going into 2011, shoppers are clinging to promotional prices instituted at the low point of the recession, and major food companies, including Kraft Foods Inc. and Sara Lee Corp., are hoping to pass along higher food costs to consumers.
Lee Peterson, executive vice president of creative services at WD Partners, a Dublin, Ohio-based consulting firm, said traditional grocery stores are seeing increasing competition from discounters such as Wal-Mart and Target, with Walgreens also moving into food and grocery. Meanwhile, Whole Foods and Costco are providing upscale alternatives.
That's forcing changes, Peterson said. "You can almost picture the industry on some kind of ledge, walking into the fog."
Traditional grocery stores "are not the cheapest, they're not the most organic or sustainable, and many of them are set up for the way people used to shop," Peterson said.
In the past, households made one trip for a week's worth of food. Now, he said, it's common to grab staples at one store, additional items at a specialty market and even make quick trips to another grocery store during the week. All these trips may be supplemented by a quarterly trip to a club store for bulk items like toilet paper or trash bags, Peterson said.
Still, the big chains represent the bulk of grocery sales. But that is expected to be tested, and Chicago, home to four of the nation's largest chains, is a key battleground, Janney analyst Jonathan Feeney said.
"If the large alternative players and formats are going to expand share gains, they will have to do it first in Chicago, where Costco, hard-discounter Aldi and Whole Foods each have a meaningful presence," Feeney noted in a December research note.
The Chicago market accounts for 3.3 percent of U.S. grocery sales, he said, adding that the recession has "highlighted the strengths of some of the alternate formats, including both Wal-Mart and Aldi, which were already growing faster in Chicago than other large (markets)."
Signs of trouble have been mounting for some time. Nearly a year ago, Jewel-Osco said it would cut 110 store management jobs. Stores had traditionally operated with two managers but are down to one.
SuperValu appears to be lagging its rivals. In the fiscal quarter ended Sept. 11, SuperValu's same-store sales declined 6.4 percent as the company cited a "difficult operating environment."
Dominick's parent, Pleasanton, Calif.-based Safeway Inc., reported a 2 percent same-store sales decline in October, citing lower prices.
Other chains are faring better. Last month, Cincinnati-based Kroger Co. reported same-store sales up 2.4 percent for its third quarter. Kroger CEO David Dillon said customers were looking for lower prices.
On the upper end, Austin, Texas-based Whole Foods reported an 8.7 percent increase in same-store sales. Chief Executive John Mackey cited progress made in pricing and programs for animal welfare and sustainable seafood.
In a research note last week, Erica Chase, an analyst with Barclay's Capital, commended SuperValu for the store closures but suggested a long recovery awaits.
"The company is making significant changes to its go-to-market strategy to improve both prices and its product offering," she wrote. "Since this will take multiple years to implement, we do not expect to see meaningful upside to earnings or in the stock in the near term."
SuperValu appears to be examining which of its many grocery formats will best serve customers for the short and long term. The company has committed to value pricing with its Save-a-Lot dollar chain expansion.
(Source: Chicago Tribune, 01/06/11)
When customers say they want to "think over" their buying decision, it's often safe to assume that they have an objection they're not sharing.
Asking "What do you want to think over?" can seem intimidating, and probably won't help you uncover the real problem. Instead, ask, "Is it a question of price?" Then quietly wait for a response.
By guessing a specific objection, you'll encourage prospects to correct you by stating their true concern. If your suggestion is correct, you probably found out what's making your buyer hesitate. You might be surprised at how much this strategy improves your closing ratio.
When it comes to video ad campaigns, targeting has a far greater impact on ad performance than ad length, according to a new study from video ad tech firm TidalTV. According to a recent online study, TidalTV found that 30-second ads can far "outperform" 15-second ads, without negatively impacting consumers' experience.
Contradicting previous research, the study also found that advertisers can achieve what TidalTV calls "30-second creative performance" with 15-second video creative.
The study confirmed that 30-second video ads surpassed 15-second video ads in click-through rates by 11%, but this improvement comes at the cost of consumer satisfaction, as evidenced by a 10% drop in video completion rates.
While it is well documented that 15-second video ads have higher completion rates, the new study revealed that 15-second ads drastically improved in performance when they were targeted to the desired demographic audience.
The ads saw a 110% increase in click-through rates compared to 30-second untargeted ads, while also maintaining a 29% lift in video completion rates.
The study also found that with proper targeting, advertisers can use higher-performing :30 second ad units without compromising customer satisfaction.
Not only did the results show a 201% lift in Click-Through-Rate (CTR) for targeted 30-second ads, they also demonstrated a 7% increase in completion rate compared to 15-second untargeted ads.
According to TidalTV, the data proves that ad relevancy does impact consumer favorability and satisfaction, and illustrates that what matters is not only what video ad length you serve, but also that marketers using targeting to place the right ad in front of the right audience will see higher performance.
"This just helps to resolve the ongoing debate that marketers and agencies face -- 'Can we repurpose TV creative?,' or 'Is 15 seconds the online standard?,'" said Kevin Haley, chief scientist at TidalTV. "The bottom line is that combining both targeting and the right creative video length can really have a significant impact on campaign performance."
The research evaluated 28 ad campaigns across a range of demographics and marketing categories, and included a mix of both 15-second and 30-second video advertisements. In total, the 28 campaigns generated around 62 million impressions.
Here are some things to keep in mind to help you remember the importance of asking for the sale:
If you've done a good job explaining the benefits of your product or service, you have every right to ask the prospect if they'd like the opportunity to enjoy those benefits by purchasing what you're selling.
People aren't naïve; they know when someone's trying to sell them something. It's both odd and even a little rude when a salesperson makes a pitch and doesn't follow through by asking for the business. The customer can be left wondering, "What's the point of this? Does this salesperson really think I have nothing better to do with my time than hearing about this product?"
Asking for the sale is the efficient thing to do. If you truly believe in what you're selling, you'll want to successfully meet the needs of as many prospects and customers as possible. Asking for the sale helps you do this by encountering any concerns or objections to overcome in this sale, or by giving the customer the right to say "no" and letting you move on to the next potential customer.
Remember, selling is a process of matching the needs of your customer with the benefits of your product. That process isn't finished until you ask for the sale.
When you fail and it starts to look like success to your peers, you know that you are a high-performance seller.
Look. Let's get real frank, real fast. Life isn't a competition with anyone other than the rock star that you were intended to be. If you think that I am advocating that you look around and compare yourself to anyone else, you are dead wrong.
You know better than that already. That's a complete waste of time.
Here is what I'm trying to say: High performers look at failure as a step closer to success. It's not an act, it's a way of life.
Rejection and loss are not end points. They are guideposts.
High-performance selling requires the discipline to look at each opportunity and say, "What could I have done differently?" Here's a reality -- sometimes there is nothing you could have done better. But I have always found 3-4 (to a dozen) tiny mistakes that all contributed to my failure.
It was by adjusting and relaunching that I was able to turn that failure into outrageous success.
Master your failures.
Despite a surge this year in short-term hiring, many American businesses are still skittish about making those jobs permanent, raising concerns among workers and some labor experts that temporary employees will become a larger, more entrenched part of the work force.
This is bad news for the nation's workers, who are already facing one of the bleakest labor markets in recent history. Temporary employees generally receive fewer benefits or none at all, and have virtually no job security. It is harder for them to save. And it is much more difficult for them to develop a career arc while hopping from boss to boss.
"We're in a period where uncertainty seems to be going on forever," said David Autor, an economist at the Massachusetts Institute of Technology. "So this period of temporary employment seems to be going on forever."
This year, temporary workers have represented a significant part of hiring. In November, they accounted for 80 percent of the 50,000 jobs added by private sector employers, according to the Labor Department. Since the beginning of the year, employers have added a net 307,000 temporary workers, more than a quarter of the 1.17 million private sector jobs added in total.
One worker who has been forced to accept temporary jobs is Jeffrey Rodeo, 43, who was laid off 14 months ago from his job as an accounting manager at a produce company in Sacramento. He has applied for nearly 700 full-time positions since then, but has yet to receive an offer. Meanwhile, to stay afloat and keep his skills fresh, he has worked on short-term stints at four different employers.
Mr. Rodeo figures his peripatetic work life will last at least another year. "Companies are being more careful," he said. "It just may take longer to secure a permanent position."
To the more than 15 million people who are still out of work, those with temporary jobs are lucky. With concerns mounting that the long-term unemployed are becoming increasingly unemployable, those in temporary jobs are at least maintaining ties to the working world.
The competition for them can often be as fierce as for permanent openings, and there are still far too few of them to go around. Indeed, the relative strength in temporary hiring has done little to dent the stubbornly high unemployment rate, which rose to 9.8 percent in November.
"With business confidence, particularly in the small business sector, extremely low," said Ian Shepherdson, chief United States economist at the High Frequency Economics research firm, "it's not surprising that permanent hiring is lagging behind."
The landscape two or three years from now might look quite different, of course. Many economists and executives at temporary agencies say there are signs that more robust permanent hiring is coming in the new year. Business confidence is up, and temporary agencies report that the percentage of interim workers who have been offered full-time jobs is also up from last year.
Nevertheless, there are signs that this time around, the economy could be moving toward a higher reliance on temporary workers over the long term.
This year, 26.2 percent of all jobs added by private sector employers were temporary positions. In the comparable period after the recession of the early 1990s, only 10.9 percent of the private sector jobs added were temporary, and after the downturn earlier this decade, just 7.1 percent were temporary.
Temporary employees still make up a small fraction of total employees, but that segment has been rising steeply over the past year. "It hints at a structural change," said Allen L. Sinai, chief global economist at the consulting firm Decision Economics. Temp workers "are becoming an ever more important part of what is going on," he said.
Several factors could be contributing to the trend. Many businesses now tend to organize around short- to medium-term projects that can be doled out to temporary or contract workers.
Donald Lane, chief executive of Makino, a manufacturer of machine tools near Cincinnati, said his company would increasingly outsource projects to contract firms that pull together temporary teams. When installing a large machine, for example, Mr. Lane said the company could appoint one full-time supervisor to oversee a number of less skilled short-term workers.
Mr. Lane said he hoped to raise Makino's share of temporary employees from 10 to 15 percent now to about 25 percent in the future.
Flexibility is another factor. Corporate executives, stung by the depth of the recent downturn, are looking to make it easier to hire and fire workers. And with the cost of health and retirement benefits running high, many companies are looking to reduce that burden. In some cases, companies wrongly classify regular employees as temporary or contract workers in order to save on benefit costs and taxes.
Certainly, Americans who have never held anything but a full-time job have sought out temporary posts because they were the only jobs available. And even before the recession, workers were learning that lifelong employment was disappearing along with phone booths and Filofax organizers.
But people still tend to prefer jobs with some sense of permanence, and with full health benefits and some form of retirement contribution.
According to a survey by Staffing Industry Analysts, a Mountain View, Calif., research firm, 68 percent of all temporary workers are seeking permanent employment.
But the whole notion of what constitutes a permanent job may simply be changing. Workers "need to expect that their lives and jobs will change much more often than they have in the past," said Jonas Prising, president of the Americas Manpower. Some people have discovered they prefer the freelance life.
Antonia Musto lost her job as a staff accountant for a newspaper in Wilkes Barre, Pa., more than two years ago. She signed on with oDesk, a company that matches contract workers with employers online.
She has since worked for several different businesses and even turned down a full-time offer last November. "I just think I've gotten very accustomed to working very fast and working with many different people," Ms. Musto, 38, said. She said she had fully replaced the income she was making at the newspaper and buys private health insurance.
Of course, businesses that can now hire talented workers for temporary jobs may find that when demand picks up, they will need to offer full-time positions with perks and benefits. But it could take a long time to reach that point.
That indefinite stretch worries workers who fear that future employers will look askance at a résumé filled with short-term engagements. Others worry that they will lose valuable years of saving for the future.
Mr. Rodeo, the Sacramento accounting manager, said he made anywhere from 10 to 50 percent less while working in temporary jobs than he did at the produce company. He has also been without health insurance all year. None of the interim employers or temporary agencies have contributed to a 401(k) plan, nor has he been able to save much on his own.
"That's the scariest part," said Mr. Rodeo.
He is confident he will eventually land a permanent post, but until then, he knows he is losing ground in planning for retirement. "Of course, for my generation, you can't plan on Social Security," he said. "Most likely, I will have to work longer."
Others are starting to face the prospect that they could move among temporary assignments for the rest of their careers.
Jose Marin, 50, known as J. D., lost his technology job in Miami in February and moved to North Carolina to live with his sister. After months of looking for a permanent job, he signed on with Modis, a unit of Adecco, and in August began a temporary assignment for a financial services company in Cary, a town west of Raleigh.
While grateful for the job, he longs for a permanent position. "I'm still old-fashioned and I still want to work for a company where I make a difference and I'm going to be there to retire," said Mr. Marin. "I know that's wishful thinking."
(Source: The New York Times, 12/19/10)
The radio industry has long been the medium that reaches consumers closest to purchase. In today's fast-paced world, it's become a big advantage to reach supermarket's key female customer. Radio has become the go-to place for grocery stores, spending more on radio advertising than television stations or newspapers.
Radio supermarket advertising was up 24% to $139 million in the first half of 2010 according to Kantar Media. When convenience and liquor stores are added to the mix, RAB data shows the broader category has grown 16% to $686 million through September.
Radio's biggest supermarket customer is Safeway, which spent $146.3 million on radio through September according to RAB. That's up 32% compared to last year. The rapidly-expanding Aldi chain is a prime example. "As we continue to grow and emerge in new markets we will continue to use a combination of radio, TV and print advertising," Aldi spokeswoman Katherine Davis says.
"Traditionally Aldi has limited our marketing efforts which have allowed us to keep advertising costs down and prices low."
Aldi spent $6.3 million on radio during the third quarter, up from just $250,000 during the same period one year ago. So far this year, it's spent $19.1 million on radio. That's a big increase for a chain that bought its first TV commercial just two years ago.
The supermarket sector is a low-margin business, with a fine line between making and losing money. As a result, most chains won't talk about their marketing -- or use of radio. But Food Lion went public with news of its marketing plans earlier this year, announcing it would take to radio, print, online and outdoor to promote "new, lower prices" across the 11 Southeast and Mid-Atlantic states it operates. VP of marketing Ken Mills says they believe the ads will "set us apart from other grocery retailers."
(Source: Inside Radio, 12/13/10)
