SOS Volume 8 No. 9 September 2009
Safeway Misses the Point … Do You Get It for Your Restaurant?
An article in the Drug Store News by reporter Michael Johnsen had a headline that caught my eye: “Safeway chairman, president and CEO addresses promotional pricing bust.” It appears that Safeway’s top exec Steven Burd is convinced in Johnsen’s words, “It just doesn’t pay to be too promotional anymore.” Is there a lesson here for restaurants during a time when we see more and more discounting? I see restaurants and groceries with synergies that come together more often than many realize when you consider the appearance of chefs selling their own lines of foods in the grocery aisles, ready-to-eat foods from grocery chefs and buffet and sandwich businesses inside the stores.
Maybe you’ve seen the ads that have come out for Safeway since this story broke. “Everyday low prices.” Safeway has made a change in the way they do business.
The Safeway CEO went on to say in the story that especially during a recession economy, the change in pricing strategy will create more “loyal” customers. This is a break from their deep discounts on selected items to get people in the door.
The quote that got me thinking is Burd’s, “The budget shopper is not very loyal at all.”
Then he described exactly how I shop at Safeway, preferring only to buy the deep discounted items. Buying only those promotional items, “ … would really hurt you from a P&L standpoint,” he said.
The point the Safeway chief misses here is that there is much more than price that goes into a satisfying grocery shopping experience. It is why I am more willing to drive 25 minutes to the nearest Whole Foods and Trader Joe’s than go the one-mile to buy anything other than the deeply discounted items when I go to Safeway now.
“My” Safeway is less than two years old. It is the perfect sized store for the way I like to shop … meaning it’s not one of those mega/entertainment stores that are so popular these days. I’m not always into sensory overload so my Safeway has soft comfortable lighting … is well designed and easy to maneuver through. When it opened most of the cashier lanes were open – showing how efficient they were. It has a laundry/dry cleaning center and a bank. Later it added a Starbucks. And they had a sandwich department. All was well in the world.
I gave up on the laundry almost immediately … the customer service desk was never staffed to handle customer issues and laundry. Lost laundry, long waits and an unwillingness to back the on time guarantee drove me away. I gave up on sandwiches when I knew more about the ingredients and the steps to make a sandwich than the person on the other side. But I was not seriously dismayed, neither of those things were a primary reason for me to go to the store.
It’s in the area of declining store cleanliness, a filthy restroom (yes, they are a foodservice operation like a restaurant in many ways), surly counter staff, indifferent management, poor restocking practices, understaffing to the point of making the checkout experience a daily challenge and a lack of awareness of the deterioration of the store … all within three miles of the East Coast headquarters. They accelerated the depreciation on the store by aging it prematurely by ten years. In the beginning the store had two big stacks of hand baskets at the left and right entrances. Today they only have 30 baskets left from the opening inventory and they are only kept at the left entrance. When I reported the dirty restroom, I was greeted with a smirk. When I questioned a price, I was mocked. One Sunday when the checkout lines were insufferably long, the manager had staff loading his SUV with his personal groceries.
So I say, there is more to loyalty than pricing.
That gets me to restaurant recession-discounting and everyone’s favorite: “restaurant week.” The head of Safeway is right: deep discounts will not build loyalty. Reasonable discounts and “restaurant weeks” work when the effort to make the experience a real one is demonstrated by the owner, managers and staff. It works if the product is not compromised in quality or size; it works if the service is splendid. It works if the restaurant is spruced up to reflect the pride of ownership. It works if we are relentless in our desire to serve and exceed expectations. It works if staff is trained to relate to the customer who may be there only twice a year for the special pricing – be happy they are here for the deal.
Working the front lines of the people, hospitality world is not easy … but I cannot imagine anything more rewarding when we pull it off. My Safeway doesn’t get it … I hope your restaurant does. I know next year I’ll be getting a Wegmans in my neighborhood … and I can tell you they do get it. Your restaurant may have a Clyde’s or a Great American Restaurant concept moving next to you. They get it.
Reinvigorate your passion as you discount. Rededicate your commitment. The customers will take notice. That’s how you build loyalty.
