- Reed's is a mid-sized regional grocery store chain established in 1939 with 192 stores in Ohio. - It faces intense competition from lower, mid, and higher priced grocery store chains in the Columbus, Ohio metropolitan area. - Key trends in the grocery industry are decreasing customer loyalty, an increase in fill-in trips rather than stock-up trips, and a rise in private label foods and value over brand influence.

1. Presented by –
Sarang Banubakde
Saurabh Mhase
Varun Balakrishnan

2. • Mid sized regional grocery store
• Established in 1939 – William Reed
• 192 retail stores, 2 regional distribution centers , 21000
employees
• Attractive stores, long hours, exceptionally attentive
customer service
• Meredith Collins – VP Marketing
• Jack Morrissey - CEO

3. • Case discusses Reed’s market strategy for the
Columbus, Ohio
• 3rd largest metropolitan area in Ohio
• Population: 2 million, Median income- $52000
• Intense competition in Grocery supermarket sector
• Three competitors of Reed’s supermarket
1. TopVal - Lower priced
2. Galaxy - Mid ranged
3. Delfina – Top ranged

4. • 50 companies dominated the industry ( 70% of overall
revenue)
• Each household spends $5200 a year on groceries with
2.1 trips a week
• Key trends-
1. Decreasing customer loyalty
2. More frequent fill in trips than stock up trips
3. Private label foods are on rise
4. Customers are preferring value to influence
5. Second generation

5. • Sales $660 millions in 2010
• Gross margin 22.7%, Net 2.1%
• Dollar store margins 8.5%
• Current market share 14%
• Goals-
1. Market share 16%
2. Increase sales by $94.3 millions
3. Increase revenues by $14.3 millions
4. Increase net profit by $1.9 millions

6. • With high quality index , exceptional customer care
and a recognized brand, Reed should concentrate
more to boast about it through IMC.
• Should launch some customer loyalty program to
appreciate customers.
• Bundling according to preference of customer
should be introduced.. For example 5buns + tuna
patties + sauces scathes +fresh veggies, can
serve approx. 4-5 burgers.

7. • Pricing should be brought as low as competitors by
reducing variable price.
• Offer more range of private label brand which when
purchased in bulk would provide better margin.
• Reed has large number of stores, so bulk offers should
be made .
• Get involve in co-branding with famous local fast food
vendor in Columbus, which would help to increase
footfalls at stores.
• Start online retailing with cash on delivery as an option.

8. Threat from Aldi and Dollar store
According to Exibit 2:
• Operating profit for Reed is 2.1 and that of Aldi is
1.5, while dollar store (3+) is 8.5
• Quality index is very high as compare to Aldi and dollar
stores i.e 8.4 over 6 and 5.6 resp.
• If Reed reduces the prices and come up with suggested
strategies , it will have no threat from Aldi and Dollar
store, as its positioning will be better in terms of quality .
• Hence in long run Aldi and Dollar have no threat but
can't be easily ignored .

9. • Offer items at discounted rates.
Feasible or not?
• High priced image still exists.
• Doesn’t bring in any major profits.
• Cherry picking by customers.

10. • Discontinue the Dollar program
• Focus more on daily price reduction plans
• Increase Sales Target: To increase the current market
share to 16%, sales target is set to 775Mn for 2011
• Focus and Maintain current Target Segment: Continue
focusing on the current target segment of affluent and
older customers with smaller household size. Their wallet
share is 8.93% only as compared to average
supermarket customer’s wallet share of 10.0%

11. • Maintain current Brand Positioning: Maintain current
brand positioning as high quality supermarket.