Analysis of Reed Supermarket Case

Reed Supermarkets is a high-end supermarket chain that has business operations in different states in the Midwestern region of the United States. The chain is well acknowledged and renowned for its quality and exceedingly observant consumer service. A consumer of Reed is to some extent older, richer and had a smaller family in comparison to the normal consumer. The average income of a shopper in Reed supermarkets is about 12% greater compared to the normal consumer.

The Columbus market, which has the biggest market share, was comparatively steady; however Reed had experienced diffident share deteriorations in previous periods. Its market share has declined in the past number of years. Reed Supermarkets is facing fresh threats and worries to its position as a market leader amid the supermarkets in the region as well as from rivals such as dollar stores and the other stores that offer lower and attractive price points.

How competitive is Reed in the Columbus market? How does Reed differentiate from others? Reed is highly competitive in the Columbus market. The supermarket chain has a total of twenty five retail store locations with each of the stores generating an annual sale of $24.6 million. In addition, the same can be perceived by the fact that Delfina, Reed's closest competitor, has a mere eighteen stores in the market. More so, the rival retailer has lower annual sales compared to Reed Supermarkets.

In addition, even with the increase in the number of new retailers, Reed Supermarkets still boasts of a good market share and also the revenues generated by the business annually. Reed Supermarkets differentiates itself from others in the market in a number of ways. To start with, Reed lays emphasis on quality. To sustain its long-lasting image of being an upmarket provider of shopper goods for Midwestern populaces, Reed Supermarkets sought to maintain its high-end position. In the past twenty years, the supermarket chain diversified the products it offers.

This included fresher, higher margin sections, which encompassed prolonged seafood selections, floriated sections, and an assortment of specialty offers such as several kinds of mustard. Another strategic way of differentiation includes the long hours of operations undertaken by Reed Supermarkets. The supermarkets chain delivered expediency for their consumers by having longer hours of operation compared to its competitors. This accessibility lets customers to shop at their ideal and favored time without any concern regarding dashing home or missing the chance to buy family provisions (Quelch and Carlson, 3).

Another differentiating aspect includes the stylish and sophisticated display cases. Reed Supermarkets believes that the times of dull, uninteresting and purely functional display cases did not exist anymore. With the purpose of sustaining their tendency of increasing the quality of their products and the value-added liveliness of the high-end retail approach, Reed Supermarkets enhanced their display areas to supplement both quality and artistic appeal for customers.

Collins considered that this specific differentiator could charm the customers' sense of style and cause an upsurge in the sales' number through consumers who are impulse buyers (Ramaswamy and Namakumari, 193). Lastly, Reed Supermarkets differentiates itself from others through the free delivery to vehicles. This trend that was started by Reed went on to become a nationwide practice. The business delivered the purchased goods to the customers' car for free.

This service increased the discernment that the supermarket chain wants to increase convenience for its consumers in their purchasing experience (Quelch and Carlson, 3). How serious is the threat posed by dollar stores and other food retailers? The threat posed by dollar stores and other retailers is quite serious and intense. This is owing to the fact that subsequent to the economic downturn, Reed Supermarkets faced challenges to its customer loyalty, as customers were very willing to shift to several stores to obtain the best budget deals.

The bulk-buying budget shoppers opted to purchase merchandises and goods from warehouses and superstores as they grew and became more prominent. In addition, the promotions of low-priced products appealed consumers to specific markets, dollar stores, and discount merchandisers. The goods that were privately labeled, has greater margin potential and the retailers were skillful and clever at shedding away the low-quality appearance of such goods.

More so, they posed a greater risk because the consumers in America had come to be more conscious about healthy lifestyle and thereby facilitate the growth of retail stores such as Whole Foods. In general, these retailers posed a great threat to Reed Supermarkets in terms of its position in the market. This is because, the business was steadily losing its loyal consumer base as the consumers perceived the business to have an opulent and affluent image or representation.

Should Collins continue the dollar specials campaign? The dollar specials campaign was an initiative started by Collins to ensure that the company shed off Reed Supermarkets' image of being only for the rich and repositions itself in the market as a brand that is both economical and quality conscious. It is for this reason that Collins should continue with this campaign. It is imperative for Reeds Supermarket to maintain the dollar specials program and hold its line awaiting the increase in the trend and therefore its revenues.

This is because it is largely assumed that with maintaining this campaign, the consumers will eventually change their perception of Reed Supermarkets as a store that is high-priced and only set up for the affluent consumers. This will enable the business to get back or appeal to its loyal consumers and in turn result in an increase in revenue. In fact, since the objective of the business is to reverse the deteriorating market share, it is recommended that Reed Supermarket ought to concentrate more on wider discounts.

This is largely because the consumers greatly value low prices in the present economy. This implies that Collins should not only continue with the dollar specials campaign but more so expand it devoid of restricting it to a particular number of days of the week or limiting it to particular products. This will not only increase the number of consumers coming in the supermarkets, but also increase the sales volume and thereby increasing the revenue generated by the company and increasing its market share.

What strategy would be most effective for Reed moving forward? Develop an action plan for Reed Moving forward, Collins requires an action plan to implement to increase its market share from 14% to 16%. The action plan for Reed Supermarkets will include the following recommended actions: 1. Enhance Product Mix: Reed Supermarkets should improve upon the product mix by presenting more private labels. The business ought to increase the private labels to twenty five percent of the total products, which are on offer.

At the same time, Collins should sustain the similar gross margin and SG&A. This particular strategy in the private labels will send a clear message to retailers such as Aldi not to enter the high-end market with private labels. It is imperative to note that private label brands have come to be an increasing trend as they rose in the market from 14% to 17% from the year 2005. In addition, these private labels encompass low costs but at the same time, they yield high margin levels for the supermarkets.

In accordance to the 2010 email survey undertaken.