Reed Supermarket Case Study

Reed Supermarkets, especially in the Columbus Ohio area, are experiencing difficulty in regards to market share. After reading the case and analyzing the data, I believe that the best option for Reed Supermarkets in Columbus Ohio is to compete more aggressively on price without creating high damage to their high quality image, and to expand their target market to all ages. These two issues are prevalent throughout the case but with the right actions taken by Meredith Collins, the VP of Marketing, these problems can be solved.

I believe that competing more aggressively on prices is Reed Supermarkets main priority. According to Exhibit 6, 75% of Columbus customers feel that better prices are most important to them. This proves that prices of goods in stores play a big role in where customers like to shop. Meredith Collins states, “We have always emphasized quality and service in our operations and advertising. Our problem is that, as a result, many consumers perceive our prices to be high.” By this statement, Meredith has acknowledged the problem at hand, that consumers believe Reed Supermarket’s prices are expensive in comparison to competitors. In the supermarket business, it is important to stay competitive with others in the market and to react to customers’ requests, which in this case is creating lower prices. Since there are low margins in the retail business, it is crucial to have high volumes in sales in order to obtain profit. The only way to increase the volume of sales is to create incentives for the customer such as lowering prices.

The fight for market share in Columbus is intense due to the increase in differentiated competition in the previous years. This differentiated competition includes Whole Foods Markets, Supercenters, Warehouse Clubs and more. Reed executives claimed that Reed Supermarkets in Columbus dropped market share in the previous years due to the introduction of Superstores and Warehouses. Since Superstores and Warehouses carry...