differing stores and store chains are increasingly being supplied by one common infra
structure.
In the United States, supermarket assortments boasting 35,000 products or more are
no exception. Nowhere else is the consumer so used to choice. Costs for shelf space
and store stock are lower than in Europe. So the need for US retailers to evaluate a
product's merits based on its cost benefit has always been relatively low. This situation
is now changing. Aided by new methods of analysis, Ahold USA is charting major cost
savings by eliminating non-distinctive product variations, particularly in non-perishable
product groups. A range of choice is only useful to the modern, critical, individual
consumer if the choice is among realistically differentiated products. Precision retailing
ensures that this is the case. Freed-up shelf space can then be utilized for products and
services which generate extra purchases.
The Every Day Low Price formats used by Giant and Edwards in the United
States, and the related formats at Finast, Tops, BI-LO and May fair require a very care
fully balanced pricing policy for the complete assortment. This format is also extremely
well suited for precision retailing. With the right mix of products and services at
attractive prices, a store not only becomes well-positioned vis-a-vis competitors from
the same industry, but also vis-a-vis alternative store formats. Ahold USA stores are
combatting this kind of competition mainly with their core expertise: quality, variety,
and value for money in fresh foods and prepared products. The choices in fresh foods,
fresh meal components, pre-cut and organic fruits and vegetables, ready-to-serve meals
and hot meals and snacks, are growing fast and ensure that the chains keep their com
petitive edge. Scale and continually expanding knowledge in the areas of distribution,
purchasing and quality control will make it increasingly difficult in the future for
unspecialized supermarket chains to compete with our stores in this assortment group.
ADDED VALUE
Today's consumer is critical and price-conscious. That does not necessarily mean he
always wants the cheapest item available. What it does mean is that he always wants his
money's worth. If in a rush, as consumers tend to be these days, they are prepared to
pay extra for the added value of a no-hassle meal they can get right away. Added-value
products and services, offering an attractive profit margin, are comprising a steadily
larger portion of the assortment. Additionally, extra non-food products and services
such as dry cleaning, pharmacies, video stores, banking and photo/film service
multiply the allure of the supermarkets as a one-stop shopping center. 'Saves time' is
an important aspect of added-value products and services for today's consumer.
Therefore, combining various kinds of shopping with electronic shopping and home
delivery options, self-scanning, and special short-cut routes for hurried shoppers are
coming up.
