lbertson's Inc., the Boise, ID-based supermarket behemoth, has taken a cue from its Osco and Sav-on drugstore units and adopted a "Customer-focused approach to growth" in 2002. The company redirected its spending habits to have greater impact on its marketplace and impact customers to drive growth. As such, Albertson's and its assorted family of stores—including Albertson's-Osco, Albertson's Sav-on, Jewel-Osco, Acme, Sav-on Drugs, Osco Drug, Max Foods, Super Saver, and Seessel's—has focused on customer-loyalty programs and implemented a company-wide "Service First, Second to None" program to reinvigorate its employees' focus on customer service.

Luckily, the company had an in-house model. According to the company's annual report, Jewel-Osco stores have "a decade of experience operating a unique dual-branded food and drugstore format, which the company rolled out in the Tucson, AZ and Reno, NV markets in fiscal 2001, and expanded to other markets during the last 10 months.

"The most important thing is that we are listening to our customers and responding to their needs," notes Karen Ramos, a communications officer with Albertson's. "We work very hard at staying close to what our customers want."

One thing seems clear: Customers want beverages. "From our perspective, if we are doing well with beverages, it is because we promote beverages," explains Ramos. "We advertise them and we display them in our stores."

"We advertise beverages in our flyers every week because our customers tell us that's what they're looking for," adds Tim Sauer, director of consumables. "They tell us they like to see beverages in the flyers, so we try to get beverages out there at competitive prices."

While Albertson's does not break out the percentage of sales from its 1,395 combination food/drugstores or its 731 stand-alone drugstores, the company's stand-alone drugstores average 18,600 square feet and are typically located on street corners. Many offer drive-thru pharmacies.

"Our criteria for bringing in a new beverage product depend on what our customers are looking for," explains Sauer. "As the demand for a particular item increases, we try to supply our customers with what they are looking for in our stores. As a company puts out new products—and if they put a lot of marketing effort behind the product, such as magazine ads, billboards or any other type of media— customers are going to come looking for it in our stores."

Sauer explains that Osco's and Sav-on's success with new products comes from keeping in touch with what customers want. "A new category that has really blossomed in the last year and a half is energy drinks," he says. "Plus, Coca-Cola has introduced Vanilla Coke and Diet Vanilla Coke. Both are doing very well. Those types of innovative items drive sales."

However, it is important for the Albertson's Osco and Sav-on stores to remain true to their convenience nature and not grow too big for their customers' britches.

"We know that people aren't going to come to us for their full week's worth of shopping," notes Sauer. "We want to be the fill-in shop for the customers. If they know that they can get what is new and innovative from us, hopefully they'll come into our stores and shop us more often."That is what growing sales is all about. ba