A completely new store format provides the consumer proposition strength to enable the company to profitably grow into new markets for the first time in over a decade.
Challenge
A leading grocery retailer was seeing growth stagnate or decline at most outlets. Growth from new-store openings was unlikely because of the company's saturated network, and its core value proposition was not strong enough for it to profitably enter new geographies. The grocer was also facing pressure from aggressive new entrants, which threatened its market position.
Executives at the company asked McKinsey to help establish a clearer consumer value proposition to help restore performance.