Reed Case

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Reed Supermarkets
Case Analysis

Managerial Communication I

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The present case deals with the positioning efforts of Reed Supermarkets in Columbus, Ohio. Reeds Supermarkets was established in 1939 by William H. Reed and has since then grown from a grocery store to chain encompassing 192 retail stores and 21,000 employees. Our present focus lies in the market of Columbus where Reed’s current market share of 14% is facing stiff competition from recent entrants in the market.

I. Situational Analysis

|Sr No |Fact |Inference | |1. |Reed laid special emphasis on quality of service, albeit at |There existed a niche segment of upscale customers in the | | |relatively higher prices than the rest of the competition – |Columbus region. | | |still managing 14% of the market share. | | |2. |Columbus demographics exhibited higher than national average |Another indicator of the presence of upscale customers in | | |income and population growth, and lower than national average|Columbus which hints at a potential market for high-end | | |unemployment. |offerings. | |3. |Supercenters operated on large scales and offered big |Reed lost cost-conscious customers, prosperous families with | | |discounts. |large storage areas, small businesses low to middle-income | | |Warehouse clubs sold in bulk, offering prices way below |earners to other competitors. | | |conventional stores. | | | |Dollar stores served the low to middle-income earners through| | | |their offerings. | | |4. |Traditional supermarkets could no longer count on the loyal |Price had become one key factor in determining where a customer | | |weekly customers who were shifting to other cheaper |would buy his/her supplies. | | |alternatives, in pursuit of value above convenience. | | |5. |The market for private label merchandise was expanding and |It had become imperative for all players in the market to focus | | |their lower quality image was being shed; besides, they |on private label goods as means of widening margins. | | |offered higher margins of return. | | |6. |American consumers had become more health-conscious. |Health and organic product selections are expected to have a | | | |good demand. | |7. |Market share of Reed fell from 15% in 2005 to 14% in 2008 and|The fall in market share happened before the economic downturn, | | |has remained stable since. |hence factors other than the economic downturn (e.g., | | | |availability of lower priced alternative) are responsible for | | |...
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