Reed Super Market Case

Assessment of Reeds competitive

environment
Dollar stores
Higher gross margin (32.5) and operating profits (8.5)
Rapidly expanding
Wont rise above 3% of market share
Supercenters ( Walmart, Target)
Low cost offerings.
5-6miles of travelling.
6-7% market share
Specialty Grocery retailer (Whole foods)

Warehouse clubs
Offering products in bulk
20% lower prices than supermarkets.
Annual sales/ store are 3-5 times more than Reed.
9-10% of market share.
Limited Selection Stores: Aldi(mini super market)
Gross margin(10.5) and profits(1.5)
Annual sales close to Reed.
Sold private labels only
Remarkably lower prices
Current market shares at 3-5% but can rise if open new stores aggressively
Reed position in Columbus market
Highest market share since last two years: 14%
Highest number of stores: 25 stores
High price, good quality and customer service, and long hours.
Average sale value /transaction was 18% higher.
Wide array of product offerings.

Objective:
Reed s competitive position (Columbus
Market)
Reed- High end,
Delfina- (Top ranged)large stores, above average service, clean
ambience.
Galaxy- (Mid ranged) weekly price reduction on selected items, old
poorly located stores, marginally profitable.
TopVal- (Lower priced) Daily low prices on high running items.
Whole foods market: Better quality and low price than reed.
Dollar stores: Targeting price sensitive buyers and expanding rapidly.
What alternatives should Collins develop to
accomplish the growth imperative for 2011?
.
Target: increase of 1% i.e. 47m

-Market effectively the increase in product offerings that has been

achieved during the last decade to attract 16% of non customers in
Columbous(as per exibit 5)
 Discount special should be given enough time to let the customers
know and experience the offerings, and contribute to the profits.
Currently the economy is in the recession and people are more than
willing to spend less (Inclination toward discounted products)