Where’s the Beef?

I used to love that commercial. Wendy’s (!) made fun of McDonald’s and the entire world started using that phrase to single out thin arguments, lack of facts or just plain superficiality.

But, we use it here to describe what has ailed Loblaw’s (or is it Loblaw? – more on that in a minute). In a failed attempt to counter the Wal Mart effect in Canada, Loblaw’s (the largest grocer in the country with multiple banners) started a massive effort to sell everything but the kitchen sink (but lots of accessories to use in the sink itself). The company tried to restructure its entire supply chain itself to handle the gidgets, gadgets and apparel that they never used to handle. Alas, even before this economic downturn, they went into a tailspin and it cost their bright CEO his job.

But what about the beef? In the interim, the worst thing that happened is that they forgot they were a food retailer, and they used to be an exceptional one at that. Their trail blazing private label brand “President’s Choice” had ME reading their Insider’s Report for goodness sake to see what creative food items they had come up with on a monthly basis. This franchise was gaining traction internationally where they sold the brand into major supermarkets in the U.S. and abroad. But they took their eye off the ball and let the 500-pound gorilla in the room dictate their strategic thinking. Not to say it isn’t difficult, but when you have a huge advantage in a staple like food and you have the largest market share of any competitor, my advice is to get better at what you do and in that way you will keep that gorilla at bay.

It didn’t work out that way. It became an obsession. Not only did it distract the entire company but as a result, their core business suffered. Time and again the shelves weren’t fully stocked, our family’s favourite cheese was constantly out of stock and lean ground beef was nowhere to be found. It has been better lately although they have a new merchandising strategy for some locations as they call them “Loblaw” and they do not carry such common items as a mop or a duster like all supermarkets carry. The Loblaw without the apostrophe ’s’ denotes food only. Who thinks of these ludicrous things?

Anyway, they are trying now to pump up their private label brands once again. In addition to “President’s Choice”, they are pushing their “Blue Menu” healthier brand, their “PC Green” environmentally friendly brand and their “No Name” value brand. They have also struck some gold with their “Joe Fresh” apparel brand thanks to Joe Mimram. That is something at least Wal Mart cannot get right (and should have) -inexpensive fashionable apparel. It is just not in Wal Mart’s bones.

I am hopeful that Loblaw’s (or whatever they want to call themselves) will ultimately prevail. I have to say that Metro is looking better and better and giving them a run for their food dollar. Hopefully Loblaw’s has learned their lesson not to look in their rearview mirror so much and keep their eyes firmly fixed on their own road ahead which was already smoothly paved for them long ago.

TheRetailTherapist