instore - February 2018 - 24

feature

"People like you are turning the
food business upside down. You are
pioneers of a community that's taking
the industry by storm."
Phil Kafarakis, Specialty Food Association

it means walking or taking a bus or train to a store like Canyon, which
doesn't have a parking lot.
And interestingly, Tarlov said, many of Canyon's customers are hightech professionals who would seem to be the ones most likely to take
advantage of the new technologies. Instead, they enjoy a break from
them. "We have a high-touch, high-service environment, which is an
antidote to many people's daily lives," Tarlov said. "It's an old-school
model that works in a dense urban environment."

Specialty foods generate $138 billion in annual sales and account for 15 to
16 percent of all grocery sales.

the consumer is not happy. It's a balance between speed and quality."
To ensure that Shipt, an online delivery platform that was purchased
by Target in December, sustains that balance, the company only hires
about eight out of every 100 people who apply to be the shoppers who
walk the aisles for their clients. Shipt also tries, whenever possible, to
have the same delivery people deliver to the same customers to establish a personal bond, Butler said.
Hy-Vee's Gosch said that while delivery is the current option of choice
for consumers when it comes to alternatives to shopping the oldfashioned way, it's certainly not the most cost-effective one for grocers.
That's why Hy-Vee is investing so many resources in refining curbside
pickup and other alternatives to delivery. "It's about how we take the
friction out of it. As retailers, we win if they pick up."
The success of Tarlov's Canyon Market, a grocery store in San
Francisco's Glen Park neighborhood, is a reminder of how there are
still plenty of people who choose neither delivery nor pickup - even if
24 * FEBRUARY 2018 * instore

That said, even though niche retailers like Canyon don't share many
SKUs with the Lidls and Aldis of the world, they're still not immune from
the pressures that everyone in the retail grocery world, big or small, is
feeling. "You have to continually get better and better at data analysis,
be smarter and more savvy to make this work," Tarlov said. Gosch said
Hy-Vee has had to slash prices on staples like milk in order to compete
with Aldi. "You can't afford to lose customers."
Other panelists stressed the importance of differentiating your stores
from those of Aldi, Lidl and other market disruptors. Ahold's Ross said
that unlike Aldi and Lidl, Ahold stores vary their offerings based on where
the store is located. "We look at different things for our different banners,"
she said. "The unique items, flavors, packaging that make our customers
excited about products and make them want to buy more." The key, she
added, is to win the race to be first to market with such items.
What works for Wawa, said Hochberg, is a combination of the old and new.
The c-store chain's customers love the instore experience, she said. But
they love it a lot more when the convenience of mobile ordering is added
into the mix. "It's convenience at its best," said Hochberg, who described
retail foodservice as Wawa's "point of differentiation" from its competitors.
A major goal for Ahold going forward is to continue to expand its
private label programs, which currently account for 20 to 25 percent of
the chain's sales, said Ross. "It's one of our key strategic pillars," she said.
"With private label, you can do a lot of trials, putting products out there
more quickly" than is possible with name-brand products.

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