March 23, 2007
Grocers Try Clothes On for Sizeable Profits
Grocery stores are not eliminating aisles of other products to make room but there is no question that some operators are cautiously moving beyond pantyhose, white socks, underwear and t-shirts associated with the local community to offer a broader range of apparel items.
Some chains with larger stores, essentially supercenters or multi-department locations as Kroger refers to Fred Meyer and others, already have a broader offering of clothing.
Other smaller formats are now exploring offering select items as a service to their customers, offering another enticement to bring consumers in and not head off to a competitor’s location.
One of the most prominent examples of a retailer that is taking it a step further with more detailed apparel and accessories (all natural and organic) is Whole Foods. The uniqueness of the items sold by the chain is just another means of it separating itself from the rest of the pack.
Of particular interest to Whole Foods and others watching its progress is that consumers are actually seeking out and buying the clothing on display.
“We’ve been selling certain items of clothing–socks, for instance–in some of our stores around the country for seven years now,” Noelle Wagner, whole body coordinator for Whole Foods’ Midwest region, told the Chicago Tribune. “But we really started to expand our clothing line about two years ago, adding more merchandise, dressing rooms and dedicated shopping areas…I’ve been surprised by how quickly the concept has taken off.”
“We like the convenience for our customers, but we also like that this clothing is in line with the Whole Foods philosophy,” she said. “Cotton is one of the most heavily sprayed crops…Organic cotton avoids that harm to the earth. And the soy dyes used mean no toxic ingredients running into the groundwater. It’s good for the environment and good for our customers. It’s no longer just for crunchy folks in Birkenstocks.”
According to NPD Group, sales of women’s clothing items have increased 76 percent in the food channel. Shoppers spent $211 million on women’s clothing in grocery stores for the 12-months from January 2006 to 2007. Interestingly, clothing sales in the food channel had grown only eight percent for the year prior.
So where is all this growth coming from? The answer, according to experts who spoke to the Trib, was supercenters.
“We expect to find everything from jeans to spaghetti sauce under one roof. If you go to Target you can put a Proenza Schouler in the basket beside your peanut butter. Do I go to food stores to look for clothing? Never. But I would definitely buy something I loved for myself or my kids even if it was in a grocery store,” said Cynthia Nellis, About.com’s women’s fashion guide.
Discussion Questions: Has the expanded presence of supercenters made it almost a necessity for grocers to start testing targeted clothing segments? Are there enough slow turning products and/or unprofitable items in most stores to allow sizeable food/drug combo units to consolidate some space and open it up for mini clothing departments? How big an opportunity is there for larger food/drug combo units to make use of clothing to differentiate and provide another draw to consumers into the store?
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Interesting question, because there is precedent for this in the UK, namely Tesco, which started as a grocery retailer then worked its way into non-food categories. I don’t think there’s much question the space can be made available; one can make any number of arguments for that. The challenge would be setting up the supply chain infrastructure and more importantly, recruiting the right merchandising talent capable of pulling together a logical program within the context of these retail brands. I also agree with one of the other points that it’s hard to envision that some grocery retailers really have “permission” from consumers to sell apparel. That being said, Wal-Mart didn’t ask for permission when they started selling food!
Clothes in grocery stores? For the most part I don’t think so. However I was just thinking where I bought my Earth Shoes–at Whole Foods. Other than mail order, I think Whole Foods is the only store in the region where I can buy them.
The Tesco example isn’t relevant to our market. The UK lacks a mass merchant niche, and food retails expanded to fill that void. Whole Foods, while apparently “successful,” would be well advised to remain as focused on the core business as possible and not divert management attention toward avenues with limited potential. Yes, the products chosen are strategic fits with the market positioning. Yet, organic cotton exists at other retailers and will be better presented, better merchandised and better priced almost everywhere other than Whole Foods–and soon–if the market for it is sufficient. If not, WF is welcome to the volume.
There are too many other ways for food retailers to improve their sales without entering into arenas which require skills, capabilities and infrastructure they don’t have.
My reaction is that yes, organic cotton apparel merchandised at Whole Foods makes sense, but the reason shoppers are there in the first place is because this retailer has differentiated their food products from the competition. The apparel products are successful because Whole Foods is operating in a niche market with a subset of consumers that are likely to respond to this offering. Smart merchandising.
Traditional grocers should follow Whole Foods’ example, but not by expanding their apparel selection. Like Whole Foods, they should focus on developing and testing new, differentiated food products, particularly those that would encourage consumers to upgrade, make incremental purchases and become loyal.
I saw this article earlier and immediately thought it was a bad idea. Grocers have absolutely no equity in this space. They’d be much better-advised following in the path of Safeway’s Lifestyle format instead of once again trying to “me-too” Mass.
Pardon the expression but I think food retailers should “stick to their knitting.” How does clothing reinforce their brand image? Let’s focus on running the best supermarkets that WOW our customers with healthy, delicious offerings accompanied by delightful customer service. Selling clothing is a distraction from focusing on supermarket core competencies.
With all due respect, there may be a very few supermarket operations capable of venturing into the clothing arena that is trendy enough, and the young target generation being so finicky. Having said that, it would be no surprise for Kroger’s Fred Meyer operations and expertise to bring to life–under the Kroger logo–a mass merchandising/supermarket business. Same would apply to Meijer’s in Grand Rapids, that was reported to be of great concern to Wal-Mart’s efforts.
Shall we go to the supermarket to look for children’s school cloths? There won’t be any Superman, or Stones t-shirts, or the new cargo pants from, Levi’s.
But, why don’t you try these on, son? Where’s the dressing room and sales associate to assist in getting the jeans altered?
Who keeps up with the trends of Hip-Hop and the X and Y generations? Is there a procurement department and clothing designer that makes U Circle jeans?
There is a meaningful lack of current sales associate support and knowledge. Or, is the supermarket industry shifting their ‘mindset’ to trends and constant change, and importantly, consumercentric practices?
Well, the Publixes and H-E-Bs can do well!…But from here, who is the next best supermarket entry with shopper expertise that can venture into an unknown, costly and dominant time consuming business?
Are the district managers going to direct labor needs for the clothing areas, too? Ouch. And a Hmmmmmmmmm…
Is testing clothes “a necessary step” on what, George, the road to oblivion? Let’s sort this one out piece by piece. Supercenters sell clothes because they are supercenters. Maybe not the purest positioning in the world, but when you bill yourself as a “place to buy everything” well…you have to carry everything.
Whole Foods carries ORGANIC clothing–and the stated rationale is “we’re a place for organically inclined people to shop.” They say it’s working–and it is pure to the positioning.
Dollar Stores (originally) carried clothing items that could sell for a dollar. Now extreme value retailers are morphing into “the place to buy the cheapest (fill in the blank) you can find. A pure positioning to be sure, but as Wal-mart found, not one you want to venture into if it is not your pure positioning. Re: their current return to “the cheapest place to buy leading brands.”
So, where’s the pure positioning rationale behind Kroger Klothes? If it is simply that they feel they have to offer every category that Wal-mart and Whole Foods does…forget it.
Socially responsible clothing at Whole Foods is a long way from mass market clothing at Safeway. For all its media prominence, Whole Foods is a tiny slice of the supermarket business. It’s unlikely that a conventional supermarket can come up with any competitive edge compared to the 2 zillion clothing stores near it.
While I am impressed with the way that Whole Foods is handling their organic clothing, I didn’t even know that there was such a thing until I read the Chicago Tribune article. They appear to have thought this concept through and are bringing relevant items to their consumers. But the average supermarket has absolutely no business trying to get into the clothing business. As poorly as they are doing with basic food items, I shudder to think of what a disaster clothing would be. What could they possibly bring to the table? Convenience? Price? Style? It makes as much sense to me as a clothing store setting up a food department–give me a break!
I too agree that there is very little rationale for supermarkets to think about clothing although I think the average store in the U.S. could eliminate shelves from about 40 percent of the store without seeing a dime dropoff in business. What stores really should be looking for is ways to be productive with the massive amount of unproductive (even with slot fees coming in) space they currently have.
Grocery stores certainly need to find ways to increase sales and if they do it by selling clothing, that’s fine as long as they know how to merchandise it. There aren’t many grocers that are good at merchandising and if they don’t take the time to merchandise clothing properly it will come off as nothing more than the seasonal merchandise aisle which in too many stores is known as the aisle of last resort for products.
The ideal of adding value to your core customer under one roof is always a tightrope. This is clearly a niche market, and potentially a space only a few can and should play in. I see this as another brand differentiator. The idea of running into Whole Foods grabbing wine, cheese and a great active top for the picnic works for me.
Would these be the same grocers who were complaining that convenience stores, pharmacies and other non food retailers were encroaching on their retail categories? Being the best grocer that you can be no longer seems to be enough. The issue here is that some people will want the convenience of being able to buy clothes at a supermarket but many don’t – food and clothes shopping patterns can hardly be called similar.
There is a danger, as with many businesses, of a loss of focus – grocers should concentrate on their core business. Getting into too many non core categories could well erode the equity they currently have. I also think the all-under-one-roof mindset is yesterday’s thinking.
The state of today’s supermarket is one of freshness. And with Bloom and A&P’s Fresh Markets, these chains are showing that “fresh” is good business.
Clothing in supermarkets is not a new idea. Joe Fresh is featured in Loblaws Canadian Superstores to good success.
Heck, when Loblaws was a U.S. retailer, they sold casual clothing in their various supermarket formats. I fondly remember my mom buying me jeans, underwear and t shirts there as a kid.
Clothes and food stuff can co-exist. It’s how they are marketed together that is the key to success.
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Interesting question, because there is precedent for this in the UK, namely Tesco, which started as a grocery retailer then worked its way into non-food categories. I don’t think there’s much question the space can be made available; one can make any number of arguments for that. The challenge would be setting up the supply chain infrastructure and more importantly, recruiting the right merchandising talent capable of pulling together a logical program within the context of these retail brands. I also agree with one of the other points that it’s hard to envision that some grocery retailers really have “permission” from consumers to sell apparel. That being said, Wal-Mart didn’t ask for permission when they started selling food!
Clothes in grocery stores? For the most part I don’t think so. However I was just thinking where I bought my Earth Shoes–at Whole Foods. Other than mail order, I think Whole Foods is the only store in the region where I can buy them.
The Tesco example isn’t relevant to our market. The UK lacks a mass merchant niche, and food retails expanded to fill that void. Whole Foods, while apparently “successful,” would be well advised to remain as focused on the core business as possible and not divert management attention toward avenues with limited potential. Yes, the products chosen are strategic fits with the market positioning. Yet, organic cotton exists at other retailers and will be better presented, better merchandised and better priced almost everywhere other than Whole Foods–and soon–if the market for it is sufficient. If not, WF is welcome to the volume.
There are too many other ways for food retailers to improve their sales without entering into arenas which require skills, capabilities and infrastructure they don’t have.
My reaction is that yes, organic cotton apparel merchandised at Whole Foods makes sense, but the reason shoppers are there in the first place is because this retailer has differentiated their food products from the competition. The apparel products are successful because Whole Foods is operating in a niche market with a subset of consumers that are likely to respond to this offering. Smart merchandising.
Traditional grocers should follow Whole Foods’ example, but not by expanding their apparel selection. Like Whole Foods, they should focus on developing and testing new, differentiated food products, particularly those that would encourage consumers to upgrade, make incremental purchases and become loyal.
I saw this article earlier and immediately thought it was a bad idea. Grocers have absolutely no equity in this space. They’d be much better-advised following in the path of Safeway’s Lifestyle format instead of once again trying to “me-too” Mass.
Pardon the expression but I think food retailers should “stick to their knitting.” How does clothing reinforce their brand image? Let’s focus on running the best supermarkets that WOW our customers with healthy, delicious offerings accompanied by delightful customer service. Selling clothing is a distraction from focusing on supermarket core competencies.
With all due respect, there may be a very few supermarket operations capable of venturing into the clothing arena that is trendy enough, and the young target generation being so finicky. Having said that, it would be no surprise for Kroger’s Fred Meyer operations and expertise to bring to life–under the Kroger logo–a mass merchandising/supermarket business. Same would apply to Meijer’s in Grand Rapids, that was reported to be of great concern to Wal-Mart’s efforts.
Shall we go to the supermarket to look for children’s school cloths? There won’t be any Superman, or Stones t-shirts, or the new cargo pants from, Levi’s.
But, why don’t you try these on, son? Where’s the dressing room and sales associate to assist in getting the jeans altered?
Who keeps up with the trends of Hip-Hop and the X and Y generations? Is there a procurement department and clothing designer that makes U Circle jeans?
There is a meaningful lack of current sales associate support and knowledge. Or, is the supermarket industry shifting their ‘mindset’ to trends and constant change, and importantly, consumercentric practices?
Well, the Publixes and H-E-Bs can do well!…But from here, who is the next best supermarket entry with shopper expertise that can venture into an unknown, costly and dominant time consuming business?
Are the district managers going to direct labor needs for the clothing areas, too? Ouch. And a Hmmmmmmmmm…
Is testing clothes “a necessary step” on what, George, the road to oblivion? Let’s sort this one out piece by piece. Supercenters sell clothes because they are supercenters. Maybe not the purest positioning in the world, but when you bill yourself as a “place to buy everything” well…you have to carry everything.
Whole Foods carries ORGANIC clothing–and the stated rationale is “we’re a place for organically inclined people to shop.” They say it’s working–and it is pure to the positioning.
Dollar Stores (originally) carried clothing items that could sell for a dollar. Now extreme value retailers are morphing into “the place to buy the cheapest (fill in the blank) you can find. A pure positioning to be sure, but as Wal-mart found, not one you want to venture into if it is not your pure positioning. Re: their current return to “the cheapest place to buy leading brands.”
So, where’s the pure positioning rationale behind Kroger Klothes? If it is simply that they feel they have to offer every category that Wal-mart and Whole Foods does…forget it.
Socially responsible clothing at Whole Foods is a long way from mass market clothing at Safeway. For all its media prominence, Whole Foods is a tiny slice of the supermarket business. It’s unlikely that a conventional supermarket can come up with any competitive edge compared to the 2 zillion clothing stores near it.
While I am impressed with the way that Whole Foods is handling their organic clothing, I didn’t even know that there was such a thing until I read the Chicago Tribune article. They appear to have thought this concept through and are bringing relevant items to their consumers. But the average supermarket has absolutely no business trying to get into the clothing business. As poorly as they are doing with basic food items, I shudder to think of what a disaster clothing would be. What could they possibly bring to the table? Convenience? Price? Style? It makes as much sense to me as a clothing store setting up a food department–give me a break!
I too agree that there is very little rationale for supermarkets to think about clothing although I think the average store in the U.S. could eliminate shelves from about 40 percent of the store without seeing a dime dropoff in business. What stores really should be looking for is ways to be productive with the massive amount of unproductive (even with slot fees coming in) space they currently have.
Grocery stores certainly need to find ways to increase sales and if they do it by selling clothing, that’s fine as long as they know how to merchandise it. There aren’t many grocers that are good at merchandising and if they don’t take the time to merchandise clothing properly it will come off as nothing more than the seasonal merchandise aisle which in too many stores is known as the aisle of last resort for products.
The ideal of adding value to your core customer under one roof is always a tightrope. This is clearly a niche market, and potentially a space only a few can and should play in. I see this as another brand differentiator. The idea of running into Whole Foods grabbing wine, cheese and a great active top for the picnic works for me.
Would these be the same grocers who were complaining that convenience stores, pharmacies and other non food retailers were encroaching on their retail categories? Being the best grocer that you can be no longer seems to be enough. The issue here is that some people will want the convenience of being able to buy clothes at a supermarket but many don’t – food and clothes shopping patterns can hardly be called similar.
There is a danger, as with many businesses, of a loss of focus – grocers should concentrate on their core business. Getting into too many non core categories could well erode the equity they currently have. I also think the all-under-one-roof mindset is yesterday’s thinking.
The state of today’s supermarket is one of freshness. And with Bloom and A&P’s Fresh Markets, these chains are showing that “fresh” is good business.
Clothing in supermarkets is not a new idea. Joe Fresh is featured in Loblaws Canadian Superstores to good success.
Heck, when Loblaws was a U.S. retailer, they sold casual clothing in their various supermarket formats. I fondly remember my mom buying me jeans, underwear and t shirts there as a kid.
Clothes and food stuff can co-exist. It’s how they are marketed together that is the key to success.