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A Time To Shine

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Last week, my RSR partner Paula Rosenblum highlighted how “perennial good karma citizen Patagonia continues on-brand and on heart… the company doesn’t get nearly enough press for its good deeds … but it’s clearly an example of long-term thinking and short-term good energy.” Even as we all cope with the sudden and severe cessation in all things “normal” in response to the pandemic sweeping the world, we’re starting to see good citizenship in action, especially from those businesses that are deemed “essential services”.

Last week in California, the governor declared a state of emergency, and identified specific services that were allowed to continue to operate, including pharmacies, grocery stores, farmers markets, food banks, convenience stores, and take-out & delivery restaurants. Since people have to eat, designating those businesses as “essential” makes all kinds of good sense. Unfortunately it wouldn’t be all that surprising if stories started to emerge of bad fast moving consumer goods (FMCG) actors price gouging on high-demand consumable products, risking long-term brand damage for the sake of short term profitability.

But it’s an underlying truth of that industry vertical that the successful ones are hyper-responsive to local demand, and pay very close attention how they are perceived. And, similarly to Paula’s observation about Patagonia, we’re able to see regional grocers rise to the occasion.

I decided to take a look at how some of the regional operators have responded to the COVID-19 pandemic. The idea was triggered by a message on March 16th from the CEO of a Northern California regional grocer, Keith Knopf of Raley’s. The CEO outlined several of the steps that the grocer is taking in light of the sharply increased demand for certain products and services. But he also pointed out that in order to support seniors who are staying in their homes, the company has established a special program that includes a pre-selected bag of grocery staples at a discounted price. Knopf also said that the grocer will continue to work with local food banks to provide a steady supply of staples, and he encouraged everyone to donate to Raley’s foundation, called Food for Families.

Finally, the CEO reached out to people in the community who have been laid off from their jobs: “we are working with other business partners such as hotel and restaurants to provide their temporarily displaced employees an opportunity at Raley’s. In the coming days we expect to add several hundred new jobs for an initial period of 30 days.” The following week, Raley’s CEO announced a special bonus of its existing employees as a way to say “thank you” for the extra effort the company required of them.

It’s a good example of a company thinking about the community that it serves, but it’s certainly not the only one out there.

In Texas, the gold standard of regional grocers, HEB, launched “Texas Helping Texans” in partnership with Favor Delivery, which it described as “a simple, low-cost solution that gives seniors access to their very own personal shopper by phone, allowing them to get essential food and supplies delivered to them, while remaining in the comfort and safety of their home.”

Eastern U.S. regional powerhouse Wegman’s announced special senior shopping hours, beefed up health and safety measures for the stores, and an enhanced disability pay policy and employee assistance resources for those impacted by COVID-19.

Ohio-based regional grocer Heinen’s offered on online “Tips for Boosting Your Immune System” newsletter, and highlighted the presence of a Wellness Consultant is each of its 23 store locations.

Retailers like Costco, Publix, and others have offered similar programs to help the communities they serve and their employees weather the storm of the pandemic. And that kind of focus certainly isn’t limited to the U.S. For example, premier UK grocer Waitrose recently announced that it is setting aside certain hard to find items exclusively for NHS (National Health Service) employees, to “help get crucial basics to NHS staff working around the clock during the coronavirus pandemic.”

Extraordinary examples aren’t only confined to FMCG retailers. For example, on March 22nd Petco CEO Ron Caughlin announced its new Petco Partner Assistance Fund, which has been kickstarted with a $2 million donation from Petco, and additional donations from CVC Capital Partners and personal donations from every member of Petco’s Board of Directors and the executive team. The CEO wrote, “whether it’s needed now, as a result of the extraordinary and still undetermined effects of COVID-19, or later down the road, this fund is intended to provide Petco partners with necessary relief and peace-of-mind when they may need it the most.”

These are great examples of retailers acting responsibly in the face of unusual circumstances. But it also points to an underlying truth, and that is that these retailers know that in the long term, their value is defined by how well consumers identify with the brand. There is no more powerful brand attribute than for a retailer to be identified as “my <store>”, for example, “my Costco” or “my Raley’s”.

It gets down to what need a retailer really serves. While all grocers serve a basic need, “to eat”, the real differentiator is found in those retailers who consumers “belong” to. It doesn’t take a global pandemic to bring out these behaviors in the best retailers – they are this way year in and year out.

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Articles & Opinions March 24, 2020
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