Experiencing Competition Head-On

From February 2017

Good Foods Co-op
Lexington, KY

Year founded:  1972
Number of members:  7,750
Membership investment:  $200
Number of employees:  100
Retail square feet:  12,000

It seems Lexington, Kentucky has just about everything for a great quality of life—strong economy, mild weather, verdant Bluegrass country, and lots of arts and culture.  For many years, the Good Foods Co-op was firmly ensconced as the place to go for natural foods, but now, some serious grocery competition has sprouted up in its lush environment.  Meeting the competition head-on has been the sole focus of general manager Bill Bickford’s two-year tenure at Good Foods.

Since he became the co-op’s general manager, three major competitors have opened with another one on the way.  The first opened when he was only three months on the job.  It’s been a wild ride with a Kroger remodel, a Whole Foods relocation, and the introduction of Lucky’s and Fresh Thyme to the market.  “There’s been an intense ramp-up of competition,” Bickford said.  “Competition is selling what we sell, and in Lexington it has been happening all at once.”  Good Foods has dealt with this change in the marketplace by focusing on the co-op’s competitive advantage is as well as its points of differentiation.

“If you think people will come because you are a co-op you’re wrong.”

Bill Bickford, general manager, Good Foods Co-op, Lexington, KY

“Our emphasis has been on local throughout the store as a point of differentiation,” he said.  “It’s more important than ever.  The competition will tell you they support local, but they mostly pretend they do.”  Good Foods takes every opportunity to share where their food comes from, and a strong area of differentiation has been their natural food dine-in café.  “We’re known for our deli food around town,” Bickford said.

Bickford also said that their customers are very price sensitive, and it’s a point of competition that is a challenge for the co-op because Lucky’s and Fresh Thyme are actively engaged in a price war.  “If you think people will come because you are a co-op you’re wrong,” he said.  “We have to focus on value to our shoppers.  I’ve noticed that some co-ops can be afraid of big sales, but we’re offering exciting sales to get new people in the door and better meet the needs of those already here.”

Bickford also said that they looked at their owner benefits and their approach to promotions.  “We want to provide incentives to ownership.”  And they also reviewed their marketing messages to help build their grocery sales and traffic.  “We didn’t want to be preachy, so we’ve worked on that.”

The biggest push has been “fresh convenience.”  They’re expanding grab-n-go and converting the café lunch crowd into grocery buyers for dinner fixins.  They’re also investing in systems that minimize “rote work” and free up time for projects that focus on efficiency and margin improvement.

It’s possible to thrive and survive in a competitive market, but it takes strong leadership and everyone’s participation to maintain success.  Bickford thinks that inclusion is a big part of the equation.  That means opting for a variety of products that go beyond meeting the needs of only the core natural and organic consumer.  “You can’t run a totally pure store.  You’d be tiny.  We have very high expectations, but it’s important to business success not to alienate other shoppers.”

Check out our open-access library!

It is a great resource for understanding all of the particulars of good governance - from agenda planning to policy templates, you can find it all in our Library.


Interested in more?

View our related Content