It is always interesting to puzzle over the polarisation within any retail sector, but grocery is particularly fascinating. In an era when price-driven retailers around the world are thriving, seeing how more premium retailers happily coexist alongside discounters and mainstream supermarkets raises some interesting questions about what value actually means.
Too often, value is seen as synonymous with price, which explains why many retailers embark on unwinnable price wars or a race to the bottom in a misguided attempt to compete. Another approach is to swim upstream, moving in the opposite direction to discounters, really dialling up the quality and service aspects of the value equation.
One such retailer is Sanchez Romero, a ten-strong supermarket business that trades only in the rather lovely city of Madrid. Alongside the opening of its tenth store in October last year, the retailer made some interesting comments about the definition of value.
The chain is routinely described as the most expensive in Spanish grocery, but responded by noting that “There is a difference between price and value. The issue is that we work with a higher value product, which is why it is not more expensive, it is just worth more.” This is a great way of looking at the disparity between high-price and low-price retailers; premium retailers are often selling items of higher worth.
And it’s not just the actual products either – it’s all about the instore environment, the service levels and the experiences.
In terms of instore environment, the store I went to on a recent trip to Madrid (sorry, I can’t remember which precise store it was) was a treat. Although it was fairly compact, the store was designed and kitted out superbly. The retailer highlights fish, meat, poultry, produce, deli and cheese as its ‘hero’ categories which each have a dedicated counter and / or expert personnel on hand to provide advice and offer excellent customer service.
The store I visited had a high degree of impact from the moment I set foot in the place: deli and cheese counter to the right, with instore café and sushi counter to the left. A wonderful start for a trip to a food store in terms of sights, sounds and smells.
The ambient and booze sections were most pleasing too: great fixtures and segmentation were deployed to make the categories relatively easy to shop, the beer section looking especially fine with a cracking range and the deployment of mini branded chillers on-shelf.
The overall look and feel of the place – industrial, exposed concrete, plenty of ducts and monochrome graphics – was smart enough and navigation was simple thanks to good sightlines across the store and helpful overhead signage.
The meat counter was very good indeed while the fish counter was virtually empty, this of course being a welcome sight for a Monday store visit. Never trust a retailer with an awesome fish counter on a Monday.
Produce was a highlight of the store. Bathed in natural light and with the vast majority of chilled and ambient lines sold loose rather than shrouded in plastic, the section was a visual and olfactory triumph. I’m well aware that making pretty pyramids out of fruit might be a massive waste of time, but it looks top drawer, so for me is time well invested.
The retailer aims to strike a balance between being a gourmet store with a strong offering in premium, exclusive lines and being a regular neighbourhood store that can be used by shoppers looking to compete a top-up shop.
It also puts great emphasis on being a retailer that offers a great array of services, experiences and interactivity. With features like personal shopping, instore demos and sampling, in-home cookery demos and wine tastings, Sanchez Romero is a great destination for all things culinary.
So, those shoppers looking for the lowest possible prices would be advised to go elsewhere. Those shoppers looking for the best possible value might face a more difficult choice.
Bryan Roberts, Global Insights Director