Reed Supermarkets: a New Wave of Competitors

MBAD 6171‐U90

Reed Supermarkets

Spring 2013

Meredith Collins faces the problem of choosing the most appropriate marketing strategy for Reed Supermarkets to implement so that the company increases its market share in the Columbus, OH market from 14% in 2010 to a target of 16% in 2011. This goal should be accomplished in spite of the new competitive challenges posed by the rising prominence of dollar and limited selection stores in the food retailing industry.
SWOT Analysis
Internal Strengths
1. Reed’s quality image and exceptionally attentive customer service;
2. Full range offerings;
3. Attractive stores, long hours, and elegant service‐case displays.
Internal Weaknesses
1. Many consumers perceive Reed’s prices are high;
2. Capital expenditure policy freezing;
3. No consensus within management on what strategy to implement for market share growth.

External Opportunities
1. The new consumer is more savvy, health and cost‐conscious;
2. Growth of private label merchandise;
3. Columbus’s economic environment is more favorable than state’s and nation’s economic environments;
External Threats
1. Dollar and Limited Selection Stores increasing market share / Aldi’s projected new stores;
2. Economic downturn;
3. Significant dwindling of customer loyalty.

Reed’s management is currently assessing the following alternatives to increase its market share in the Columbus market:
 Continue its ongoing “dollar special” campaign;
 Terminate the “dollar special” campaign and implement an everyday low pricing model;
 Convey the value created to consumers by reinforcing the range and quality of offerings;
 Increase low‐priced specials, expand private label brands, and introduce double couponing.
In addition, I would also consider the following alternative:
 Make an offer to buy some of Galaxy’s troubling Columbus stores.
In evaluating the aforementioned alternatives, Reed’s