A new Kantar Retail survey of a co-located Walmart Supercenter and a new Market Basket grocery store in the Northeast identifies how the smaller competitor effectively competes with the large chain.
The study analyzes basket prices, merchandise assortments, in-store promotions and overall ambiance, enabling suppliers to recognize and align with the two retailers’ positioning. It also reveals tactics that smaller retailers can leverage to compete against larger rivals.
London-based Kantar assessed Walmart’s performance in consumables relative to Market Basket, a successful and expanding regional grocer in the Northeast. On the same day in May 2010, Kantar analysts visited a newly constructed 76,000-square-foot Market Basket and a Walmart Supercenter located within a mile of each other in Epping, N.H.
“Walmart’s grip on price leadership was strong, but Market Basket effectively carved a relevant value proposition through assortment and signage to fulfill its shopper expectations,” said Leon Nicholas, Kantar director of retail insights, and a contributor to the study.
For example, a comparison of 37-item national-brand product baskets showed Walmart to be about $14 cheaper overall. But Kantar noted that Market Basket acted aggressively on price, with an emphasis on edible grocery. While both retailers widely used price promotions, 12 of the Walmart items were on “rollback” promotion and would have otherwise been more expensive. Further, Walmart’s 12-item private label basket was 5.3 percent more expensive than Market Basket’s equivalent, Kantar reported.
Meanwhile, Market Basket employed several tactics to suggest a more personal, authentic atmosphere, such as personalized interaction (handwritten signs, live sampling announcements, employees assisting shoppers) and a “folksy” atmosphere (samplings of local products, warmer décor).
To download a copy of Kantar Retail’s study, “Challenging the Behemoth: Assessing a Regional Grocer’s Tactics Against Walmart,” follow this link.
Tewksbury, Mass.-based DeMoulas Market Basket operates 61 supermarkets in Massachusetts and New Hampshire.
Kantar is a global retail insights and consulting business that works with more than 350 companies globally to transform the purchase behavior of consumers, shoppers and retailers.