babs wrote:There is a lot of misinformation in this thread. First of all, I am not employed by Fred Meyer but am very familiar with their operations.
If you look around the Portland market they have been remodeling many stores to expand the food department with additional space for Nutrition (in most cases doubling the size of it) and allocating more space to wine and beer. They are doing this because they no longer view Walmart and Targets as threats. Rather they view New Seasons Market, Whole Foods, Market of Choice and others in this fast growing space as their biggest threat. Losing customers who have the $$$ to buy organic, natural is a bigger threat than anything else. They want to do everything to hold on to these high value customers.
Most Fred Meyer stores are in the area of 135-175k sq ft. So they feel they have the space to expand grocery while pruning general merchandise and not losing the one stop shopping concept. They have been getting killed on the electronics front. Clothing generally only works in more rural areas (that''s why Kroger Marketplace stores have so little clothing, it's just not profitable for them). They lost the hardware and paint business years ago to Home Depot and Lowes.
You may not like the changes but it's based on the reality of the market they compete in. Food first. General merchandise is there to support the food business. Fred Meyer had evolved over the years. They killed home improvement centers when home depot took over the market. They've cut back in other areas as the competition has evolved. Sitting on your hands and watch someone else eat your lunch just guarantees that you will go out of business down the road.
- The clothing departments in the other-market "Marketplace" stores are still controlled by Fred Meyer. I'm not sure how much volume that department gets (I think that grocery-oriented stores in America have always struggled with the "selling apparel in a grocery store" problem) but I do know that those sections were originally furniture (Ashley Furniture with just junky stuff that didn't look nice, even by Ashley Furniture standards, nor was presented particularly well) and those became clothing. And even if it's low-volume for Fred Meyer I was under the assumption that clothing was a high profit margin thing, which is why the department stores largely sold out to apparel focus years ago. The Kroger Marketplace stores tend to have little clothing in them because they are that small, because once you build out a full supermarket without scrimping on the full service departments (which the discount store supercenters tended to do) there's not a whole lot of space you have to play around with. Not sure what you mean about rural areas...the Kroger Marketplace format with the clothing only tends to show up in larger markets.storewanderer wrote:
- Expanding the Nutrition/organic section shouldn't justify the severe pruning of general merchandise. The customers who have that sort of money probably won't be shopping at Fred Meyer anyway for organics, and if their reason for going to Fred Meyer is the general merchandise selection, then too bad...they'll just head over to Amazon instead. It's definitely a bold move to try to take on general merchandisers and organic retailers simultaneously, but more likely they'll be good at neither.
- This "food first" mindset is I believe one of the causes for deflation in the industry. With drugstores pushing food, Target pushing food, Amazon pushing food, and the increased competition from non-traditional grocers, it puts traditional supermarkets in a bind. The good news for Fred Meyer is that it has something beyond just a traditional supermarket. Like storewanderer said, no other store really has a comprehensive GM/food mix like Fred Meyer does, at least in the area. I've said before that Kmart's grocery department was executed correctly but never built up enough to really stick around for very long. Walmart's mix just isn't very good in food at all, their perishables are sub-par (no meat market, and even full-service delis are uncommon), and the grocery department is poorly merchandised with large displays of generic product and not much selection. Start eroding away the things that make Fred Meyer unique and it will begin to crumble.