Colorado’s No. 2 grocer is aiming to attract more customers with a new store format aimed at playing up its produce, bakery and prepared-food offerings.
It’s designed to appeal to consumers’ time-stressed lifestyles and appetites for organic food.
After testing a handful of so-called “lifestyle stores,’ Safeway Denver division leaders plan to begin converting all 144 stores to the new model at a rate of 10 to 20 each year.
“No store is immune from becoming a lifestyle store,’ said Scott Grimmett, Safeway’s Denver division president.
But some analysts say Safeway is late to catch an industrywide trend, and at least one questions whether the new format is the fix the company needs.
“They’re a little late to the party,’ said George Whalin, president of Retail Management Consultants in San Marcos, Calif. Other grocers such as Whole Foods have already mastered the concept as a way of fending off competition from discounters like Wal-Mart and Costco, who are eating away at their market share.
Nationally, Safeway is pumping $100 million into a brand repositioning campaign that touts the stores’ new emphasis. Featuring the tag line “Ingredients for Life,’ the campaign debuted in newspaper advertising and in-store materials this week.
Lifestyle stores feature softer lighting, wood floors, expanded produce and floral sections, gourmet bakeries and ready-to-eat meal options that include an olive bar, sushi bar, European cheese table and a full-service meat counter. “It’s almost like going back to the forties or fifties,’ Grimmett said of the meat-cutting counter. “We are starting to find folks prefer that.’
The new stores sell 85 to 120 varieties of organic produce compared with 35 to 50 in traditional Safe way stores. Store displays are designed to prompt meal ideas, often featuring cookbooks, kitchen items and ingredients for a recipe, all on the same rack.
The new stores also bulk up their selection of prepared food and include a carving station that offers main courses and side dishes during the dinner hour.
“Food service is one of the biggest trends in the industry. Schedules are so busy, people need help with meal preparation,’ Grimmett said.
The question remains whether the company’s focus on design will help it win more customers.
Safeway holds a 22 percent share of the Denver-area grocery market and a 20.7 percent share of the statewide market, according to research published in March by the Shelby Report of the Southwest. Market leader King Soopers had a 40.3 percent of the Denver market and 35.6 percent of the Colorado market.
Both chains saw their market shares dip slightly from the previous three-month period, while No. 3 player Wal-Mart increased its share by about 2 percentage points in Denver and statewide.
Grimmett said stores experience “a substantial increase in sales’ following their conversion to lifestyle stores, although he declined to specify how large an increase.
One industry expert says the idea is uninspired and unfocused.
“It’s like they’re emulating other companies, but they don’t have a clear vision,’ said Kevin Coupe, founder and editor of MorningNewsBeat.com, a Darien, Conn.-based website for the food retailing and manufacturing business.
“If Safeway really wants to capture any kind of retailing magic, they have to start thinking like marketers instead of like merchandisers and accountants,’ he said. “They have to have the courage to be really innovative instead of just emulating what they think other people have been successful doing.’
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
What’s new
New features of Safeway “lifestyle’ stores:
Expanded selection of organic produce: 85 to 120 varieties up from 35 to 50 in traditional stores
Full-service meat counters where meat can be cut to order
Increased selection of prepared soups, panini sandwiches, chicken marsala, lasagna, rack of lamb and crab cakes
Larger full-service floral departments with expanded floral selection and home accessories
Wood floors and subdued lighting
Merchandising displays with cookbooks, kitchen tools and ingredients for one recipe.
