Small local grocery store: disadvatages in metropolitan area

EST1 Task 1

Being a small, local grocery store chain in a major metropolitan area is daunting. National and regional chains are regularly putting out of business small stores owned by local companies. This reason, along with the at large social responsibility taking hold of consumers requires all companies to adjust their organizations from solely a profit-seeking motivation to being socially and ethically understanding in their business outlook.

Company Q recently closed two stores in higher-crime-rate areas. Those closures where attributed to the consistently negative balance sheets of those stores. If these stores in higher-crime areas were not making a profit, what is the reason they were losing money? To take a socially responsible approach to all of our store locations will mean understanding our customers. For example, if a store in a predominately-Jewish neighborhood is selling non-kosher items we could expect these items to not be sold in the same volume as kosher items. Taking a Jewish-centric approach to a store’s marketing in a Jewish neighborhood makes good business and ethical sense. When we understand our costumers and their communities, we understand that business flourishes where society thrives.

Company Q, after many years of customer requests, began to offer a limited selection of health-conscience and organic products in all of their stores. Offering organic and other health-conscience offerings in response to customer demand is a positive step in forming a social contract with our customers instead of merely offering them what we feel they need. Understanding our customers means providing them what they want and what they need. Offering high margin products to customers who have neither the financial ability to afford the higher costs associated with those products, nor have a desire to purchase these products will not help Company Q’s bottom line.

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Product choices must be targeted to the consumer. Ethnic foods must be endemic to the neighborhood their being offered in. Marketing of stores in cultural or racially specific communities must be stocked with products that meet the needs of those people. It takes very little effort to understand our customers, but that little effort can be the difference between a store being successful or failing. Insuring that Company Q’s stores differentiate themselves in the marketplace will help give the company a competitive edge in these tough economic times.

Company Q’s current policy of disposing of day-old products is a perfect example of missing a great public relations and corporate social responsibility opportunity. When asked by the area’s food bank to donate product that would otherwise be thrown away, management declined. Employees concerned management over lost revenue through possible fraud and theft instead of donating the food.

The first concern with this issue is understanding its costs and actual or perceived benefits. Company Q will write-off any product that needs to be disposed off due to exceeding the expiration date. The products are disposed of in a dumpster and that is the end of the products usefulness in Company Q’s current viewpoint. The company, if paying by weight or volume, will incur greater disposal rates from the waste removal company for disposing of the unsellable product instead of donating it to the local food bank.

The second concern with not donating product that would otherwise be thrown away is employees’ attitudes. If we’ve communicated to our employees that we will not be socially conscience to those people in need in our community, what does that say to our employees since they are also a part of the local community. In our digitally connected society it would be foolhardy to not expect a socially aware employee to film the disposal of food that we may not be able to sell but which could be given away and used by those in need. The potential negative feedback of such an event for a small chain like Company Q cannot be overstated.

The above concern dealt with not just the direct financial costs to our company but the possible social capital loss that we find in our current position. Thankfully, Company Q doesn’t need to expend much in the way of financial or employee effort to make a considerable difference in our store neighborhood community respect. One delivery van can be used to pick-up the product that would otherwise be thrown away at the end of the workday and transported by the store’s supervisor to the local food bank. The food would be unloaded by food bank staff while the Company Q supervisor could discuss with the food bank managers the impact that those donations will have on the community. The marginal time spent loading and travelling to the local food bank is a minor inconvenience for the storeowner at worst and a major public relations benefit for not only the local store but also Company Q in general. We could also expect a reduction in our waste removal services since less product will be thrown away.

“The point is to attract customers wanting to make a difference in society through their purchasing” (Bronn, 2001, p.2). The intrinsic and extrinsic benefits for not only Company Q management but also storeowners and store employees alike, clearly proves the need for a socially conscience corporate attitude.

References

Bronn, P.S., Vironi, A.B. (2001). Corporate social responsibility and cause related marketing: an overview. International Journal of Advertising, 2. Retrieved February 27, 2010, from http://www.basisboekmvo.nl/files/cause-related.pdf