Case Study Fred's Grocery

As an example of how a company mission statement can serve as a focus for improvement in your business's performance, consider the case of Fred's Grocery, a small one-store business, which suffered sales declines when a large chain supermarket opened a store in the neighborhood.

Fred initially considered lowering prices and adding many new items to compete, at great expense and lower margins. However, a family discussion about the "mission" of Fred's Grocery caused Fred to respond in a less direct, less costly, less risky manner.

Fred and his family realized that their mission was to serve the convenience needs of local, upscale neighborhood shoppers for specialty items and "fill-in" grocery items that they needed. The majority of Fred's shoppers spent an average of only $12 ($5-$25 per visit), considerably less than at the larger chain store. Fred and his family decided they would offer more services and specialty items than the larger chain store. Their array of specialty goods, prices, and services also separated them from convenience store chains like 7-11.

Fred's carried all groceries to the shoppers' cars and apartments and delivered gift baskets/flowers, at no extra charge within a five-block radius of the store. They also added specialty items to their store, putting in an espresso coffee bar, wine kiosk, and food/flower gift assortments. They upgraded and limited the amount of fruits and fresh vegetable selections and added fresh, warm breads and cookies.

After one year, Fred's Grocery realized its best year ever and increased both shopper traffic and average sale by 100 percent to an average of over $25 per shopper. Fred felt the new chain store was the best thing that ever happened to his business, thanks to the time he took to discuss and refine his mission statement!