In 2018 we launched the inaugural issue of the COMPETE magazine. Our featured focus for the first issue was the growth of the extreme value channel. In that issue, we discussed our predictions for the future and proven tactics to compete against them. We also shared inside information on what makes them who they are. Lastly, we shared success stories from around the industry including AWG members who have battled and won against this channel.
In 2022 we are revisiting the topic. This time we focus on several different competitors, but one very key competitor is Dollar General. Now with over 18,000 locations, Dollar General was just named Progressive Grocers retailer of the year. An industry award typically coveted by primary grocery retailers; we should once again take notice.
Many of the topics and insights that were shared in 2018 still ring true today. There were a couple of main points that were made in the 2018 issue that is still very relevant.
- There is no one single magic bullet to competing with this channel.
- Those who have had success keep a relentless eye on their value proposition and perception. They realize that price itself is only a component of that equation.
- Those who have been successful against this channel don’t become obsessed with imitating Dollar Generalbut maximize their strengths to overcome and win. They create a desirable point of differentiation.
- It is a full-time job to compete against them. Although they may be large in scale, theirability to be nimble is extremely limited by the format and most importantly, people.
My how things have changed since 2018 and being named retailer of the year in 2021 is sort of like winning first place at a demolition derby! If empty shelves, chaos in their supply chain, inflation destroying the “dollar” perception even further, are all a recipe for an award, perhaps we don’t mind?
Not so fast. To see the why’s and how’s of significance to this award you must look deeper. You must think about the post-apocalyptical world when we somehow return to a state of normalcy in the industry. Many experts are starting to predict that 2025 could be the year in which we see the next apocalypse-the apocalypse of the consumer regardless of what political party controls Washington. When the government free rides stop, and the consumer becomes inflationary exhausted, what then? Remember 2018 and 2019 when we saw SNAP benefits reaching all-time lows and declining? What were we talking about most during that time? The extreme value channels and their impact on our customers of course.
This award by Progressive Grocer is probably more about future “intent” than it is past success. The article talks a lot about numbers like the intent to have over 10,000 locations with a limited selection of produce. The intent of having a produce and bakery offering that constitutes 20percentof the items that account for 80percentof the sales. There are no mentions in this article about quality, customer service, or community support. It does not even mention price a single time in the article. It mentions how more consumers are finding DG relevant to meet a larger variety of their basic needs, especially in food and HBC. In DG’s own executives’ philosophy, their objective is not to be a grocery retailer but a true general store providing convenience and value to low-income shoppers.
Fear not, our members can overcome and win as they always have. Will it be easy? NO, as it never is. Collectively as a group and by continuing to focus on “Converging” our $22 billion in retail sales power, we can overcome and win. Members focusing on the things that make them great in their communities and neighborhoods will also be paramount. Lastly, it will take a relentless passion to get credit for YOUR value proposition with your customers and a focus to WIN at perishables.
Tye Anthony
SVP, Merchandising
