Competitive Assortment in the Retail Channel: Cvs vs Supefresh

Topics: Convenience store, Price, Milk Pages: 10 (1197 words) Published: February 16, 2013
For this assignment, we decided to visit CVS on 20th and Chestnut Street and Superfresh on 10th and South Street. CVS is a chain convenient store and Superfresh is a chain grocery store. CVS carries high-convenience items and food basics that people commonly use and need quickly, such as toilet paper, soft drinks, beauty aids and microwavable and prepared foods. Superfresh carries wide variety of food products, including perishable items like meat, produce and dairy, along with general merchandise items like cleaning supplies, paper products, and health/beauty care products.

There are two categories we have identified that Superfresh and CVS compete with each other on are ice cream and makeup. At Superfresh, the selection of ice cream brands and flavors is both broad and deep – at CVS it is narrow and shallow. However, at CVS, the assortment of makeup products is both broad and deep, while at Superfresh it is the opposite in both regards. These two categories fit within our perception of each store’s overall strategy in many regards. Superfresh, being a supermarket, is generally known for its large assortment of food products – that is, customers specifically go to supermarkets like Superfresh for their variety and product assortment, especially in frozen treats. In Superfresh, the ice cream takes up an entire freezer aisle – along with many displays and end cap promotions on new products and flavors. Consumers also go to supermarkets as planned visit – an i.e. a Sunday outing to the grocery store to load up for food for the week is considered a common occurrence in many households. This is another reason why prices are generally lower at the supermarket vs. a convenient store – besides a supermarket being able to capitalize on volume buys and inventory discounts. At CVS, ice cream purchases generally tend to be impulse buys – therefore, a large assortment is not necessary – the basics usually fit the bill. Because CVS also carries less inventory, their prices are a few dollars higher.

For makeup products, CVS devotes almost two aisles, as well as end caps to this item, while Superfresh only has less than ½ an aisle set aside. While the retail price of comparable products is similar at both stores, CVS discounts their makeup products on a regular basis – in fact, there is always a sale or some promotion on some makeup brand every week at CVS. CVS also heavily advertises their makeup selection in their weekly fliers and devotes at least one or two pages every week for this. Furthermore, it appears that CVS probably derives a large percentage of its top line revenue from makeup product sales, as their bright and bold displays are made obviously present in the stores. Selling makeup is clearly not a focus for Superfresh, as such a small section of their store is devoted to these items and the promotions on these items is almost non-existent in their fliers.

As for similarities on these two product categories, both CVS and Superfresh promote their ice cream on a regular basis in their in-store circulars and generally both stores’ personnel assistance tend to be lacking in these department. Customer service appears to not be a priority for both types of stores.

In light of analyzing the similarities and differences in the product categories between ice cream and makeup sales at both CVS and Superfresh (using the VAD framework), we would consider CVS a 3 in value when positioned as a version of the Superfresh format. The price point is a bit high for food (ice cream) products but generally balanced out by the ever present discounts to regular price on the cosmetics CVS sells. CVS would rate a 4.5 in accessibility, as the chain is way above average in accessibility – it is present on virtually every block in the Philadelphia area and is open 24 hours a day. However, in terms of discovery, CVS would rate a 1.5 as the product selection is limited and the service from the personnel is also lacking.

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