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4296

JUNE 17, 2011

JOHN A. QUELCH
CAROLE CARLSON

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Reed Supermarkets:
A New Wave of Competitors

At 4:30 p.m. on December 6, 2010, Meredith Collins, VP of Marketing for Reed Supermarkets,
walked down the sidewalk of the 10-store strip mall that housed Reed’s Westgate Plaza branch in
Columbus, Ohio. Collins didn’t shop; instead she took mental notes about storetraffic, first at the
Reed store and then at an indirect but increasingly worrisome kind of competitor—a dollar store.
The Reed was predictably well lit and inviting, and Collins could see three registers open and two or
three customers in line at each. “Not too bad” she thought, “but not what I would hope for at this
time of day, this close to the holidays.” She’d felt the same way at two otherReeds she’d visited that
day.

tC

Collins walked on to the Dollar General (DG). A fairly steady stream of shoppers entered DG’s
doors, their progress slowed by families exiting with plastic bags jammed full. When Collins looked
inside, she noticed workers filling what was obviously a new freezer case—the first freezer she had
seen in a dollar store that day. This DG was doing just aswell, to judge from this glimpse, as the
Family Dollar she’d walked past half an hour earlier at North Valley—but no better than the Aldi
store she had visited in the morning. That Aldi trip was interesting: a bright and spotless minisupermarket, run by a giant firm from Germany that carried one-tenth the food items that a Reed did
and sold virtually no brand names, only private-label—but stillposed a threat to Reed due to its
remarkably low prices.

Do

No

As she drove out of the parking lot, thinking back to last week’s discussions with the management
team about the newest threats to Reed’s position as a leader among the region’s supermarkets,
Collins wondered how Marketing could target competitors like DG. It seemed clear to her that dollar
stores and Aldi both were takingbites from the Columbus region’s family food budgets. Moreover,
as she recognized from the diverse range of advice provided by her management peers at Reed,
defending against these competitors would not be as clearcut a mission as positioning Reed versus
other area supermarkets—or even against WalMart and Costco—had been. Nevertheless, with all
these competitive challenges, Reed CEO JackMorrissey had held firm in his mandate that Reed
needed to grow its Columbus share in the coming year. Collins frowned as she drove to another strip
plaza to look around.

________________________________________________________________________________________________________________

HBS Professor John A. Quelch and writer Carole Carlson prepared this case solely as a basis for class discussionand not as an endorsement, a
source of primary data, or an illustration of effective or ineffective management. This case, though based on real events, is fictionalized, and any
resemblance to actual persons or entities is coincidental. There are occasional references to actual companies in the narration.
Copyright © 2011 Harvard Business School Publishing. To order copies or request permissionto reproduce materials, call 1-800-545-7685, write
Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored
in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or
otherwise—without the permission of Harvard Business Publishing.Harvard Business Publishing is an affiliate of Harvard Business School.

This document is authorized for use only by Alexander Varon Sandoval until May 2012. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.

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4296 | Reed Supermarkets: A New Wave of Competitors

Company History

Reed Supermarkets was established in 1939, when...