Reed Supermarket Case Sample

Read Summary

The problem statement in this case is to increase Reed Supermarkets’ market share from 14% to 16% by 2011, despite the challenges of a fragmented market with low operating margins and no investment plan for new stores. Some options for achieving this goal include increasing margins, introducing niche products, improving operating efficiency, implementing loyalty programs, introducing mid-range products, forming partnerships with corporate houses, and introducing private labels. The recommended strategies include closing the Dollar Special service, targeting an entirely new category of customers, increasing the mix of products with a focus on private labels and healthy options, stretching the sales target to achieve the 16% market share, and advertising the organic and healthy products through print media or the internet. The reasons for these recommendations include the need to leverage the current customer base, the potential of private labels to improve the operating margin, opportunities to capture a portion of the Galaxy market, and the potential to increase the average spending per transaction.

Table of Content

Problem Statement: Meridith Collins. VP of selling of Reed Supermarkets. is asked to increase the current market portion of 14 % ( 2010 ) to 16 % by 2011. The undermentioned restraints are apparent: 1. The market is fragmented with multiple participants.

2. The operating border is simply 2. 1 % . no range of any mistake. 3. No investing program for increasing the no. Of shops.Options available:1. Increase margin/increase gross – It will increase profitableness. 2. Introduce Niche merchandises – Healthy nutrient points. organic merchandises. 3. Increase runing efficiency – It will take down the operating cost. 4. Loyalty plans – It will assist in retaining the clients. 5. Introduce mid-range merchandises – It will pull non-affluent consumers. 6. Make tie-ups with corporate houses/ spouses – It will add to the consumer base that may stay loyal. 7. Convert to Dollar store/ unfastened dollar shops as a separate trade name – New trade name. 8. Introduce private labels – New scope of merchandises.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

Recommendations:1. Closing of Dollar Special service – As per the given informations. the Dollar particular merchandises were being offered at a monetary value 44 % lower than the mean monetary value which was non bring forthing money at all. Infact it was making a loss of 80 % . Besides this Dollar strategy had hit the image of Reed ( Quality merchandise marketer ) . 2. Reed clients were older and flush participants. so Reed should widen its services farther to make an wholly new category for itself. The flush category had high net incomes which could be tapped through enhanced and out of the universe shopping experience. 3. Mix products- Increase in the mix of merchandises. particularly private degrees and healthy merchandises will really better the operating border. These merchandises can be introduced as an surrogate to high terminal merchandises. 4. The gross revenues mark demands to be stretched to accomplish the 16 % market portion. This can be achieved by presuming the overall market size remains same over the twelvemonth ( 4. 74Bn ) . The gross revenues target necessitate to be 775Mn. 5. Reed can pull more clients through advertisement through print media or cyberspace with highlight O organic and healthy merchandises. This can assist Reed in pulling clients of Galaxy.

Reasons for recommendation:1. Keep the current client base:

Reed’s currentcustomer section is composed of flush and older clients with. smaller householdsize. Their one-year income is 12 % higher ( $ 58000 ) so state’s average family income of $ 52. 000. On Average Annual spend by clients in US is $ 5. 200. Hence on mean walletshare of Reed’s client is 8. 93 % ( mention Appendix ) as compared to 10 % billfold portion of anaverage client. Additionally. on mean client in US spends $ 47. 62/trip to a supermarket and presently Reeds Average Gross saless Value is $ 31. 42/transaction. This must be leveraged to increase the mean gross revenues value and billfold portion. Having said that. it seems that current downswing has impacted the disbursement wonts of Reeds client section.

2. Private labels: They are non considered inexpensive merchandises.

3. Catch a portion of Galaxy ( around 1 % ) – Almost same line of merchandises but its location is distant. It is easy to pull the Galaxy clients to Reed.

4. The mean buying per dealing per client is $ 47. 62 per trip which provides a range of $ 16 farther buying at Reed supermarket.

Cite this page

Reed Supermarket Case Sample. (2017, Aug 11). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront