Most Conventional brands struggle to match Club/Superstores and Discounters on base prices. Zehrs Markets, a 2nd Tercile Conventional player, outperforms peers on RPI by excelling in attributes that shape affordability perception – scoring above market average on private brands savings, but more importantly, going above and beyond with loyalty & rewards that are helping their customers save money. Competing on the lowest base prices is an uphill battle, but Zehrs leverages these strengths to stay competitive, while 2nd and 3rd Tercile Conventional players continue to fall behind.

Discounters and Club/Superstores remain subpar on Quality, creating an opportunity for Conventional brands to capitalize. Beyond stronger Price Perception thanks to Loyalty & Rewards, Zehrs Markets leads the Conventional segment on Quality—consistently matching or mostly surpassing other brands across most Quality attributes. This advantage elevates perceived benefits, and because Zehrs Markets' Price Perception is improved through loyalty, its Customer Value Proposition stands in a more compelling position. Notably, Zehrs' Quality perception is above average but not as strong as Loyalty and Personalization; the brand invests the necessary resources to differentiate amongst competition, but without losing focus on Loyalty. Over-investing in Quality at the expense of Loyalty/Rewards can be dangerous, as we see with 3rd Tercile Conventionals that struggle to be competitive.

Players can also lean into the pillars of Speed, Convenience, and Digital as means to further refine their ability to compete, and even though they are less impactful, they can be resourceful tools to refine one’s Customer Value Proposition. Zehrs Markets trails our example Discounter and Club/Superstore across most attributes but stays within a competitive position, never significantly behind market average. On the other hand, our other example, 2nd Tercile Conventional, which is ranked near the back of the 2nd Tercile and close to being a 3rd Tercile Conventional matches Zehrs on many of these attributes and even beats Zehrs at speed to get in and out. This underscores that Speed, Convenience, Digital strengths alone aren’t enough to position you for long-term success, if a Conventional isn’t also achieving a winning combination of Quality and Personalized Promo, Rewards.

2nd Tercile Supermarkets have better outcomes than 3rd Tercile Conventionals

In summary, 2nd Tercile conventionals such as Zehrs Markets have established a blueprint for a customer strategy that maximizes results for this format, against discounters, superstores, Costco, and other conventionals:

• Excel at targeted savings through best practice in loyalty programs, keeping price perception “close enough” to discounters’ One-Two Punch strategy.
• Keep pace with discounters, superstores, Costco, not in promotion volume but in promotion relevance.
• Drive enhanced personalization, time savings through your app.
• You have to invest in personalization to drive an advantage, but not at the expense of your ability to excel at personalization.

This strategy optimizes results. 2nd Tercile Supermarkets have displayed just as strong a Share of Wallet as 1st Tercile Discounters and Superstores. Importantly, they are not retracting in sales as 3rd Tercile Conventionals, which also indicates their ability to maintain Loyalty despite the competitive pressure from Discounters and Club/Superstores.