Reed Supermarkets: A New Wave of Competitors

Reed Supermarkets: A New Wave of Competitors

Shuang Zhao

4/24/2013

1) From a customer point of view, Reed is facing fierce competition from Galaxy etc which targets similar wealthy customers. Dollar shop is also challenging Reed for its low price.

From a company point of view, Reed has some deficiencies in providing good customer service, due to long waiting hours.

2) Reed’s target customers are high end customers. Positioning: Reed offers high quality food and specialized organic products, for affluent customers who care about the quality of food seeking healthy, natural eating lifestyle. Reed addresses these needs by providing natural, healthy food supported by their specialization in organic and seafood category.

Product: Reed could introduce more private labels and have a new category of natural, organic food and this will solidify their customer base and attract some new customers.

Price: Reed has high quality food so they should not reduce the price just to compete with dollar stores or TopVal, because that is not consistent with their brand positioning. So they should keep their current price strategy.

Place: Reed should not open new stores, despite the convenience of Dollar store may steal a small portion of customers. Lots of Dollar shops have opened but that do not mean Reed should react to that, since people need their daily food from supermarket anyway and opening new stores would increase the cost significantly given the tough market.

Promotion: They should stop the dollars special because it results in a loss and it is not consistent with the brand positioning of Reed. And they could use coupons and category ads for promotion.