Compete is a verb.
I’ve written and said this so much over the past few years that I’ve been getting sick of it. Every once in a while, I think to myself that I’m just restating the obvious, that everybody understands that active, aggressive, competitive instincts are absolutely necessary just to survive in the current retailing environment. And then I see something that makes me think that not everybody gets it. So, since it is a new year, I think it is time to say it again: Compete is a verb.
My frustration over the supermarket industry’s seeming inability to comprehend this reality bubbled up a few weeks ago when Safeway announced that through its Blackhawk gift-card division, it would begin selling McDonald’s “Arch Cards” at all of its supermarket locations in denominations of $5, $10, $25 and $50. Now, there’s no question that Safeway will drive some money to its bottom line by selling these cards. But my question is this: Why would it want to?
Would Safeway sell gift cards redeemable at a supermarket across the street or around the corner from one of its stores? Of course not. Because it would say, quite legitimately, that another supermarket is the competition, and it wouldn’t want to do anything to drive people to the enemy.
The problem, it seems to me, is that Safeway and a lot of other companies in the supermarket business apparently don’t see a fast-food chain such as McDonald’s as the competition. Or, if they do, they see it as competition once-removed, essentially in a different business and catering to a different customer with different needs.
It sort of reminds me of the line from “The Big Chill,” when Jeff Goldblum’s character says, “I don’t know anyone who could get through the day without two or three juicy rationalizations. Ever gone a week without a rationalization?”
Safeway and a number of other supermarket chains, in essence, have rationalized their inability to compete with fast-food and quick-service restaurant chains because they are unwilling to do what is necessary to compete with them on every front. So they sell tickets to the other guy’s parade, hoping to make a few pennies in commission and giving away the bigger sale and the larger possibilities.
I would say, yet again, with emphasis: Compete is a verb.
Supermarkets are competing with anyone who sells food, a list that seemingly gets longer every day. And I believe they should be doing everything possible to offer options and alternatives to customers, rather than selling them gift cards that allow them to buy their meals at McDonald’s or Bennigan’s or Chili’s or any of the other foodservice companies for which gift cards often are sold by supermarkets.
Let me put it another way. Every lobster bought and consumed at Red Lobster and every pizza bought at Pizza Hut is a lobster or a pizza not bought at a supermarket. Supermarkets should look at it in precisely that way. To do otherwise is to accept loser status.
This doesn’t mean that I’m against gift cards. I think that supermarkets certainly can sell them if they are for the Apple Store, or Barnes & Noble, or Nordstrom or Best Buy or any one of a number of retailers with which they do not compete in what should be a core competency.
Now, I have to admit that not everyone agrees with me on this one. (I actually worry when people start to agree with me…it means that I’m in danger of losing my edge.)
One counter argument goes like this: “The decision to visit a restaurant is driven by the circumstances of the meal. Invariably, convenience is the driver to choose a meal out rather than preparing it at home…I don’t see Safeway losing any revenue on it.”
I disagree. While it would be cor