Reed Supermarkets: Bringing Back Loyalty

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Position Statement
We recommend Meredith Collins reintroduce the loyalty program in Reed Supermarkets. Currently, they are leading the Columbus area with a 14% market share. With the recent evolution of the food retailing industry, this number has remained stable for two years with no growth and is susceptible to further decline. Throughout the recession, customer loyalty has significantly diminished and by implementing a redesigned loyalty program, Reed Supermarkets will be able to incorporate low pricing on products, an increase in market share, and maintain their brand image.
Decision Options
• Reintroduce Loyalty Program
• Expand the “Dollar Special” Campaign
• Continue on the Current Course
Decision Criteria
Among the relevant criteria to Meredith Collins’s decision, three are most essential.
• Low Pricing on Products
• Increase Market Share
• Maintain Brand Image
Proof of Recommended Option
The first option is the preferred decision because it satisfies all three criteria.
Based on customer survey data, as shown in Exhibit 1, Columbus area customers cite low prices as the most important factor when deciding where to grocery shop. By reintroducing the loyalty program, Reed Supermarkets will be able to offer lower prices on products to the existing customers while continuing to offer the current pricing structure to nonmembers. According to the survey results, the top citing factors revolve around lowering prices.
Exhibit 1 Reed email survey of 400 Columbus area customers, March 2010
Percent of customers citing factor as important to them % Citing factor

Better prices 75
Better discounts and coupons 62
Double coupons 47
Promotions and coupons that are mailed to my home 44
Promotions and coupons that are emailed to me 34
More natural/healthy foods 27
More local foods that are grown/produced near where I live 26
Source: Reed email survey of current customers

The CEO of Reed Supermarkets had set a Columbus market share

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