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10.06.2005

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Can Safeway Do It?

Recently Safeway announced a partnership with famed nutrition guru Dr. Dean Ornish, who will now lead the company's new Advisory Council on Health and Nutrition. This seems like a logical step given Safeway's recent efforts at brand revitalization - what with the mainstream grocery segment feeling the heat from both directions. But as impressive as their efforts are, we have serious reservations as to their ability to pull off this transformation.

In truth, we are impressed by many of Safeway's recently enhanced private label lines such as the Signature Soups, Milena's Pizzas and Signature Panini's - not to mention a bevy of other "Safeway Select" options. These products really are better tasting and manage to update a product mix that was sorely out-dated.

Along with these new product sets, many stores are getting a much needed facelift as they are transformed into "Safeway Lifestyle Stores" - an updated look and feel designed to add value and differentiate the Safeway experience from the more mundane big-box retailers. They tapped design firm avizia to help deliver this effect by rethinking a number of elements within their stores, including lighting, fixturing and merchandise presentations.

One of the Safeways in our neck of the woods recently received this treatment, and while the store looks a little better inside and the staff have been friendlier (including always thanking you by name when you check out, which is always a bit annoying), beneath the surface the place is still a garden variety Safeway. This is the same problem US automakers face when they try to compete with foreign carmakers in the luxury segment. As hard as they try, a Monte Carlo with leather seats and a performance-tuned suspension is just not an Audi A4.

Lurking underneath Safeway's veneer, we find the same disinterested employees (and equally disinterested customers) that were always there. True, the employees are much nicer, but they lack a genuine sense of "food passion," compared to the folks who work at the likes of Trader Joe's, Central Market or Wild Oats. Ditto for the customers, most of whom appear to be slogging through the aisles because, well, it's the closest store to their homes. Yes, the stuff inside is a bit nicer, but in most regards this is the same old place.

Maybe the best evidence of this disconnect - this inability to realize the goal of a truly differentiated, premium grocery retail experience - can be found on a recent visit during their "Rancher's Reserve" beef promotion. The banner outside promised a "Big Celebration" for Safeway's new "quality designate" meats. We figured we'd check out the scene inside, maybe sample some nice grilled steak and chat with a chef for some cooking advice.

Alas, none of those elements were to be found. Instead we were greeted by the oddest in-store promotional display we have ever encountered. Two full-sized inflatable dolls dressed in garish western garb (think: red bandanas and sheriff's badges), seated at a table with a few paper plates and an empty shot glass - oh, and a basket of beef jerky conveniently located nearby (see the picture to the right if you don't believe us). This was the extent of their massive in-store celebration of their new Rancher's Reserve program, which in a way is the whole point.

You see, it's not the furniture or light bulbs or management philosophy or marketing department that makes Trader Joe's such a unique, "special" experience - it's the everyday reality created by the interaction between management, team members and customers on an ongoing basis. You can slap a new marketing program on top of your Safeway, your Albertsons or your Kroger, but is you don't change the store's essence - the foundation that lies underneath the veneer - you're never going to generate an authentic, credible experience.

For better or for worse, what you see here is the truest expression of what Safeway really is as crafted by those most connected with the store.

Sure it's silly and garish, and yes, it's most unfortunate choice of promotions, but alas it is reality.

And to those of you tempted to dismiss this evidence as the unfortunate byproduct of a well-intentioned but inexperienced category manager, consider the second photo, which we snapped during a similar Rancher's Reserve beef promotion from yet another Safeway Lifestyle Store - this located many miles away from the first.

There's a lot that could be said here, but we'll just add that the goofy pumpkins are an extra nice touch. One data point can be an anomaly, but two a trend doth make.

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