Reed Supermarkets Case study help

Reed Supermarkets:
A New Wave of Competitors

At 4:30 p.m. on December 6, 2010, Meredith Collins, VP of Marketing for Reed Supermarkets, walked down the sidewalk of the 10-store strip mall that housed Reed’s Westgate Plaza branch in Columbus, Ohio. Collins didn’t shop; instead she took mental notes about store traffic, first at the Reed store and then at an indirect but increasingly worrisome kind of competitor—a dollar store. The Reed was predictably well lit and inviting, and Collins could see three registers open and two or three customers in line at each. “Not too bad” she thought, “but not what I would hope for at this time of day, this close to the holidays.” She’d felt the same way at two other Reeds she’d visited that day.

Collins walked on to the Dollar General (DG). A fairly steady stream of shoppers entered DG’s doors, their progress slowed by families exiting with plastic bags jammed full. When Collins looked inside, she noticed workers filling what was obviously a new freezer case—the first freezer she had seen in a dollar store that day. This DG was doing just as well, to judge from this glimpse, as the Family Dollar she’d walked past half an hour earlier at North Valley—but no better than the Aldi store she had visited in the morning. That Aldi trip was interesting: a bright and spotless mini- supermarket, run by a giant firm from Germany that carried one-tenth the food items that a Reed did and sold virtually no brand names, only private-label—but still posed a threat to Reed due to its remarkably low prices.

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Reed Supermarkets:
Key question: (must be addressed in presentation)

1. What adjustments, if any, to make the current marketing and positioning strategy for Reed Supermarkets.

Discussion Questions:

1. What is Reed’s position in the Columbus market? How does a supermarket make money?

2. What strategy would be most effective for Reed moving forward? Is this strategy defensible?

3. How serious is the threat posed by dollar stores and Aldi?

4. Should Collins continue the dollar specials campaign? What is the financial impact of this decision?

5. What should Collin’s action plan be for Reed for 2011

Product Code :Case20

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