The Inquirer had an article on Acme’s declining business over the years (though it still “retains[s] its top sales spot”). From the information presented in this article, it would seem to me like Acme’s caught a bit of what GM had. That is, a poorly defined strategy that lead to lesser sales, that lead to negotiations with the UAW, that lead to major concessions by the UAW, that did nothing to stop the collapse of GM because the root cause of GM’s issue was a poor business model. Not saying that the comparison is perfect or anything, but I believe it gets the point across.
The article compares Acme to ShopRite, and talks about how ShopRite had the second sales spot, right below Acme.
Analysts said ShopRite has lured customers by offering low prices week after week and stocking goods tailored to the desires of the shoppers who live near each store, rather than items purchased by corporate buyers, as is common in large chains.
Selling merchandise at low prices costs money and means less profit. But some chains are willing to take lower profits if they can draw more customers – they make up the difference on volume.
ShopRite has been willing to do that, analysts said, which helps it compete for Wal-Mart customers. But it has managed to still feel like a supermarket.
However, it would appear that Acme, unlike ShopRite, has no attack plan.
Acme’s strategy?
“I have no idea,” Stanton said. “I don’t know what they’re trying to convince people of. I see a store that’s neither the lowest price nor the widest variety.”
Metzger, of Food Trade News, said that since its acquisition in 2006 by Supervalu, Acme has been preoccupied with paying off corporate debt rather than reinvesting cash into many newer stores or selling cheaper merchandise.
By the way, ShopRite workers are unionized — they, like Acme workers, are represented by Local 1776. Their stores have strategies. Acme has been running off the momentum of the past, bringing in customers simply because that’s where the customers have always gone. That and because the customers know the workers. You may wonder why that line was bolded. I bolded it simply to highlight how Acme’s contract may completely and utterly backfire in its aim.
For instance, last night I was at Acme, and in the span of 10 minutes (and this is was an evening shift, not even a morning shift when most of the regular customers are in), I had multiple customers generously offer not to shop at Acme should the company do anything detrimental to its workers. One customer identified with us because her father had been a union steel worker. Another customer said to me, “I’m with you guys.”
Also, if Acme thinks many its current employees will continue shopping at Acme should the company push its final offer through, they are sorely mistaken. They cannot pass this final offer and retain the customer sizes they once had.
Acme is still number 1 in area, even if the margin is narrowing. Hopefully they act quickly to reverse this, instead of messing around in areas that will really not benefit it much in the long run. There needs to be a general rethinking of strategy, not a simplistic attack on the workers.
I agree with your aricle. Acme has no sales stratigey what so ever. They do absolutly nothing to bring custemers in, The 5%profit margin is to high. The merchindise they sell is low quality and sucks. Custemer service alone is not going to bring them back. Now we see that contract talks have brok down and the company is going to come out of this looking bad. Most ACME emplyes are not going to stand behind the company., They are mad as hell! who can blame them? They bult this company and there wathing it fall. I feel the opineans of the ould timers there should be respectede. What there doing to us is wrong. At this point there no better the Wal Mart.