Andronico’s Breaks from the Pack

Bob Vosburgh January 25th, 2008

A few entries back we wrote about an East Coast supermarket operator who made the tough, but correct, decision to stop selling tobacco in all its stores.

Well, another independent retailer has announced a similar ban. Andronico’s Markets in California will eliminate sales of all tobacco products after Feb. 4 — joining Rochester, N.Y.-based Wegmans Food Markets, which made an identical announcement last week.

Bill Andronico, the 8-store-chain’s president and CEO, sounds like he has quite a list of resolutions for 2008 (it’s still January, right?). “We are making some important changes this year and this is just the beginning,” he stated in a news release. He’s referring to environmental and health issues, and cited the Bay Area retailer’s recent switch to cage-free eggs as another example of its new emphasis on health and wellness.

“It’s all part of a rising consciousness at Andronico’s,” he added.

Cigarettes are profitable, there’s no doubt about it. Figures compiled by Information Resources Inc. and featured as part of our annual SN category review issue showed sales of cigarettes in the supermarket channel topped $4.9 billion last year, down 3.1% from the year before. Even taking into account the impact of state and federal excise taxes, tobaccco remains No. 1 in nonfoods sales in the supermarket channel.

So what about these two retailers? Maybe they’re onto something. Perhaps they are discovering that — as conventional supermarkets delve deeper into wellness marketing — they need to reconcile their business goals with the personal aspirations of their customers.

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3 Comments to “Andronico’s Breaks from the Pack”

Arthur Mio Says:

January 25th, 2008 at 6:02 pm

Obesity is America’s #1 health problem. Fatty foods (meat and dairy products) on the way out? Diabetes is America’s fastest growing degenerative disease. Bye-bye Coke? I wonder if same store sales in Wegman’s has decreased because smokers are shopping elsewhere so they won’t have to make another stop? Any non-smoking Price Chopper shoppers beginning to shop at Wegman’s because of their gutsy decision?
Gene Ruda Says:

January 27th, 2008 at 11:09 am

Wegman’s and Whole Foods same store sales are down because the economy is shifting; primarily due to the cost of energy. The innovative, value-added service and products that Wegman’s pioneered are mainstreaming into a popular, efficient delivery model (Wal*Mart). It is cynical and simply untrue that mainstream consumers disregard their health and wellness in favor of existing, well-known brands (Coke/Camel) or that they are immune to the efforts of the supplier to provide a “better” product, i.e. “better for you”.

True retail leaders are in touch with the demographic reality. Older people need to be cared for; we are older (and wiser). Yes, they are challenged by the economy, yet they continue to lead; that is why they are differentiating on other issues, like cigarettes and other “sustainability” initiatives.

The retail operator has a role in the betterment of our society. Like a parent or care giving relative, they buy on behalf of their family (the customer); and because the child or needy relative might choose unwisely (e.g. consume candy until the parent says, “Enough!”) they make a better choice. The cult of consumer power, the so-called “my way” hero who enjoys unbridled free-market consumption is losing influence in American society. We have a gigantic, costly societal health crisis to address. It takes courage and leadership to overcome the laziness of “I give them what they want”. All participants in the supply chain should listen to the voice of reason, which says “Give them what they need”.

It is clear that addictive and unhealthy cigarette smoking is on the wane. Regulating the messaging (package labels/ads/placements) and controlling supply has been effective. Thank goodness!

Consumers are educated and persuaded by the focused and sincere effort of an industry segment or interest group, i.e. growers, manufacturers, processors, distributors, retailers, operators; even politicians and movement pioneers. They are smart enough to recognize a confidence game. That is why they are choosing to shop at Wegmen’s, Whole Foods and other authentic, standards bearing leaders. They will also buy from “certified” sources, or buy an authentic, “value-added” product from Wal*Mart or Safeway. Organic certification (USDA-NOP) and other emerging standards like “fair trade”, “humane” and “sustainable” don’t dictate purchasing; they serve the whole supply chain, plant-to plate, farm-to-fork; everybody will “buy in” to recognizable need; and these days we recognize that we need “health and wellness”.

The consumer interprets the offering of the supply chain (including its messaging) and “votes” through buying. They ultimately determine what makes them “well and healthful” through their purchase. It is appropriate to regulate, limit or eliminate consumer choice to achieve a greater good. I applaud Andronico’s and Wegman’s for their leadership on this issue.
Bob Vosburgh Says:

January 28th, 2008 at 11:15 am

I’m surprised both of my original entries on Wegmans and Andronico’s received such passionate comments. Arthur, maybe you can help me, because it’s tough to tell your point (and whether it’s a bit facetious or not). Forgive me, it’s Monday. More to the point is Gene’s observation that these retailers are showing leadership, which was basically my point in both my entries on this subject.