C&C Grocery C&C

C & C. Grocery

Do you think that the proposed reorganization will work in addressing the four problem areas identified in the case? Why will it or why won't it work?

The proposed solution is as follows: the consultants for C&C Grocery Stores, Inc. intend to unify the control over the store under a single district manager. At present, control is diffuse, and every worker in the produce department reports to a produce manager, every meat employee to the meat manager, and so forth. The consultants also hope to expand non-grocery items in inventory to improve store sales. However, this plan does not address the first, fundamental problem of C&C -- its obsolescence.

C&C does not fill any real niche in the competitive grocery market. Big box discount stores like Costco and Wal-Mart are making inroads into its core consumer demographics of budget-minded shoppers. Proposed IT changes are on 'the back burner' yet it is because of innovations in IT that stores such as Wal-Mart can keep low inventories with high levels of consumer satisfaction. Only 10% of space is used for inventory at Wal-Mart stores: "Part of Wal-Mart's strategy for catching up was a point-of-sale system, a computerized system that identifies each item sold, finds its price in a computerized database, creates an accurate sales receipt for the customer, and stores this item-by-item sales information for use in analyzing sales and reordering inventory. Aside from handling information efficiently, effective use of this information helps Wal-Mart avoid overstocking by learning...

Stockpiled inventory is almost always a loss for a company, regardless of the type of merchandise, but this is particularly true of perishable grocery items. If, for example, beets are not selling, the beets cannot be sold at a discount and sit on the shelves for several weeks. At best, they have a few days of shelf-life after beginning to wither.
Changes in consumer shopping habits are also significant. One of the most notable successes within the grocery market has been Whole Foods, which is notable for making what was once considered niche products -- organic, vegan, gluten-free, and international foods -- mainstream. Part of Whole Food's success may be attributed to changing demographic trends, including greater concerns about sustainability, the popularity of 'special diets' like vegetarianism and 'sourcing' of foods. However, the store's commitment to its ideals, even when unpopular (such as its CEO's lack of support of universal healthcare), its customer-friendly, clean layout, and its tasty and well-displayed foods have won it respect and a loyal following (Fishman 2004). This is despite the fact that its price point is extremely high.

The proposed solution to C&C's downturn also does not address the second problem, the frustration store managers feel because they cannot learn general managerial skills. The overall trend in management amongst successful businesses worldwide has been away from hierarchical leadership and instead to favor team-based approaches. At Whole Foods, "individual team leaders made decisions about…