Food Lion just can’t wait to be king of Chattanooga grocery stores — that’s why the grocery chain is shaking up almost every aspect of its local supermarkets.
The Chattanooga and Raleigh, N.C., markets are the first to see stores with wider aisles and price reductions on about a fifth of the stores’ 30,000-item inventory.
“It’s really an offensive move on our part,” Food Lion President Cathy Green Burns said. “We have been deliberate in executing our strategy versus being defensive to a competitor’s strategy.”
Some of these changes challenge industry norms. For example, removing displays to clear aisles goes against the conventional idea that confronting customers with more discounted products will lead to more sales.
“As an operator, I was very concerned with pulling all the merchandising we did from the sales floor. I expected to see sales trend downward,” Chattanooga district manager John Morris said. “It was just the opposite. It never trended downward. It started moving up gradually, and then it increased as we implemented more.”
Food Lion decided to revamp its direction after consumer research showed customers wanted specific changes, Burns said. The grocer tweaked store layouts, displays and staffing to address concerns.
“They said if you make it easier to shop, we’ll shop more,” Morris said. “We’re obviously not as smart as our customers about what they want.”
The good news for Food Lion was customers wanted very few expensive bricka-and-mortar changes to the stores. Aside from a few relatively minor additions such as extra lighting in parking lots and upgraded restrooms, most of the changes are related to staffing and store layout.
The largest staffing changes came to the produce department. Data showed consumers wanted staff on hand in the department, just like they would be in the meat and bakery sections.
Food Lion employs about 800 people at their 19 stores in the Chattanooga market. Locally the grocer competes strongly against stores such as Bi-Lo and Walmart, but Chattanooga has room for growth. The area was chosen as a testing ground because Food Lion has a relatively small presence here, especially compared to the 167 stores in the large Raleigh market.
“Both markets are critically important to understand what elements will resonate with the customers, where we’re hitting the mark and where we’re not,” Burns said.
Food Lion is no stranger to change. Its parent company is one of the most forward-thinking in the industry, according to Mark Hamstra, retail editor of trade publication Supermarket News.
“Food Lion does try to stay out ahead of the industry in a lot of ways,” he said. “They’re always experimenting with new projects.”
With Walmart hammering the low-price angle, Hamstra said, supermarkets across the industry are trying to find ways to stand out beyond pricing.
“It’s harder and harder for grocery stores to distinguish themselves just on price alone,” he said.
Burns hopes these changes will keep Food Lion a distinct brand, helping her stores gain an even larger presence in Chattanooga and eventually up the East Coast.
“We’re not foreshadowing any market share gains, but the opportunities are there,” Burns said. “It was really about tethering ourselves to the consumer. When you deliver on those expectations, then over time we should see market share gains based on that.”